Just Off Multi-Week Highs As OPEC+ Output Cut Lifts Sentiment

WTI and Brent are ~$0.20 firmer apiece, having struggled to stage a meaningful break above their respective Wednesday’s highs in Asia as the bullish impetus from OPEC+’s production quota cuts has moderated.

• To elaborate on the latter, both benchmarks notched fresh highs on Wednesday after OPEC+ announced a 2mn bpd cut to output quotas for November, closing ~$1.50-2.00 firmer apiece for a third straight higher daily close.
• WTI and Brent later hit session highs after U.S. crude inventory data pointed to a surprise drawdown in crude stocks (corroborating reports on API inventories on Tuesday). Gasoline and distillate stocks declined as well, while there was a small build in Cushing hub stocks.
• A note that despite the 2mn bpd headline cut in the OPEC+ target production quota, the actual decrease in output is likely to be significantly smaller, with the group continuing to miss collective output targets ahead of Wednesday’s meeting.
• Elsewhere, the White House has denied an earlier WSJ source report of the U.S. preparing to relax sanctions on Venezuela, potentially allowing energy giant Chevron to resume oil production in the country.