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Oil Sentiments Turn Bullish after API Reports a Substantial Inventory Loss

Crude oil prices strengthened on Wednesday soon after the American Petroleum Institute (API) revealed a higher than expected drop in inventories of around 5.42 million barrels for the week ending October 9. At 4:33 pm EDT, the WTI crude was trading at USD 41.03 while Brent crude was trading at USD 43.31. The market closed on Wednesday with the news that OPEC+ is looking forward to gradually relax production cuts from January next year despite surging coronavirus cases in many countries, after the Russian Energy Minister Alexander Novak expressed his optimism on a great bounce back in the energy market. The crude oil market has created a big buzz worldwide since OPEC and its partners led by Russia agreed in April’20 to cut back their production by 9.7 million bpd to tackle the unprecedented demand slump following the outbreak of COVID-19. Analysts revealed that average Brent price have rebounded almost by 36% on QoQ basis in Q3 but a second wave may decelerate the demand recovery and may keep the producers exposed to the risk of less balanced market.