Oil turns higher ahead of OPEC-Plus meeting

Oil prices turned higher as the US market opened on Thursday, to extend gains for the second straight day ahead of the the OPEC-Plus Ministerial Committee monthly meeting, to decide production levels during April.

US crude 1.4% to $61.94, after opening at $61.09, and hit a day low of $60.55, and Brent crude rose 1.5% to $64.85, after opening at $63.89, and hit a day low at $63.36.

US crude rose 2.7% yesterday, 2.7%, and Brent crude futures rose 2.3%, in the first gain in 5 days.

The US Energy Information Administration reported on Wednesday that crude inventories rose 21.6 million barrels during the week ending February 26, missing forecasts of a drop by 1.3 million barrels.

This weekly build is the largest in the US history, due to the cold weather wave that hit the country recently, after temperatures dropped to lowest level since 1989, especially in Texas, the heart of the US oil industry.

The total commercial inventories rose to about 484.6 million barrels, the highest level since the week ending January 1.

The US production rose 300K bpd last week, at a total of 10.0 million barrels per day.

The OPEC-Plus Joint Ministerial Committee will meet on Wednesday to review the global output cut agreement and the latest developments in the global scene, amid growing odds that the collation might agree to increase output during April.

During the OPEC Plus meeting on December 3, the members agreed to abandon a planned increase in production of about 2 million barrels per day, while agreeing to increase supplies by only 500 thousand barrels per day as of January.

OPEC-Plus also agreed on April that the third phase of the cut agreement will be lowered to 5.7 million bpd starting from January 2021 to April 2022.

The new decision replaces the planned hike of 2 million barrels, and the total of the new cuts is about 7.2 million barrels per day.

This comes amid growing odds that the collation might agree to increase output during April due to an expected supply deficit during the first quarter of 2021.

Reuters reported that OPEC expects a drop in global oil inventories by about 400 million barrels this year.

Saudi Arabia also announced a voluntary output cut of about one million barrels per day during February and March to balance the market, but Riyadh's decision about the supply levels during April remains unclear.