Oil close up 3.4% after OPEC report

Oil drilling rigs

Oil prices closed higher today, June 13, recouping previous session losses, as investors assessed monetary policy outlook in the world's largest economies and following the OPEC monthly report.

Brent crude futures contracts for August delivery increased by 3.4%, or $2.45, to close at $74.29 a barrel.

WTI crude for July delivery also rose by 3.4%, or $2.30, to record $69.42 per barrel.

China's central bank cut its short-term lending rate for the first time in 10 months, adding momentum to the faltering post-pandemic recovery in the world's second-largest economy and largest importer of crude.

Markets are awaiting monetary policy decisions, with the US Federal Reserve expected to decide on stabilizing interest rates on June 14. The European Central Bank is likely raise interest rates by 25 basis points on June 15.

In its monthly report, OPEC kept its forecast for global oil demand growth for the current year unchanged at 2.3 million barrels per day, and expectations for growth in supplies from non-OPEC producers at 1.4 million barrels.

According to the report, the average price of the basket of OPEC crude prices reached $75.82 per barrel during May, down $8.31 from April's level of $84.13.

Total commercial oil inventories in OECD countries increased by 30.2 million barrels on a monthly basis during April, at 2.80 billion barrels. Preliminary data also indicated that US commercial oil inventories rose by 21.5 million barrels on a monthly basis in May to 1.25 billion barrels.

The American Petroleum Institute report on oil inventories is expected later today, as well as the International Energy Agency’s monthly report on June 14. In addition, the Energy Information Administration will issue official data on US inventories, amid expectations of a decline in crude stocks by 1.29 million barrels.