Oil prices inch higher amid support for supply cuts, lower inventory forecast

TOKYO (Reuters) – Oil prices edged higher on Tuesday after Russia’s energy minister, Alexander Novak, said cooperation with OPEC on supporting the market would continue and as analysts forecast a second weekly decline in U.S. crude inventories.

Brent crude LCOc1 was up 7 cents at $66.46 a barrel by 0105 GMT. U.S. West Texas Intermediate CLc1 was 4 cents higher at $60.56 a barrel.

OPEC, Russia and other producers which have linked up to curtail production and support prices will continue their cooperation as long as it is “effective and brings results,” Novak said in an interview on Monday.

Cooperation with the Organization of the Petroleum Export Countries (OPEC) would continue “until the market requires it,” Novak added.

OPEC and other producers agreed in November to extend and deepen output curbs in place since 2017. The reduction of output could see as much as 2.1 million bpd taken off the market, or about 2% of global demand.

U.S. producers have only been too happy to fill in any gaps in the market, pumping ever greater amounts of crude and reaching a record high of around 13 million bpd in November.

That has helped swell inventories, which have been stubbornly resistant to drawdowns. U.S. stocks are up around 1% this year.

Crude stocks are, however, expected to have fallen by about 1.8 million barrels last week, a second week of declines, according to a preliminary Reuters poll.

Still, gasoline stocks are expected to have risen for a seventh week in a row and distillate inventories are forecast to have gained for a fifth consecutive week.