In a separate development, the American Petroleum Institute ( ) published a weekly report on U.S. crude stockpiles that showed another increase by 2.4 million barrels last week. The report on inventories of the U.S. Department of Energy is due today. The experts forecast a decile of about 1.7 million barrels; however, if the data comes in line with the report, we will have the fourth gain in crude oil inventories in five weeks.
Brent Crude broke $71.00 and dropped to $70.70 during early Asian hours. WTI is hovering around $62.50, down 0.8% in Asia.
On the supply side, oil facilities in Libya were sabotaged once again, while Nigeria's Forcados crude pipeline remains closed after a fire that occurred nearby. These unplanned outages, coupled with falling production in Venezuela, will tighten the supply structure; however, the market has already priced in all those developments.
OPEC and its allies may extend the production curbs to fight the elevated levels of global inventories, but it is not all set yet as Russia may oppose the deal.
While Russian budget benefits from the growing oil prices, the production cuts put the country's biggest industry under pressure and challenge the government with tough choices.