Oil prices rose in Asia on Wednesday after hitting their highest levels in about a year in the previous session, supported by an unexpected draw in U.S. crude stockpiles and an estimate by the Organization of the Petroleum Exporting Countries of a global oil market deficit this year.
Market sentiment was bolstered by news that Democrats in the U.S. Congress took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan without Republican support.
U.S. West Texas Intermediate (WTI) crude futures climbed 33 cents, or 0.6%, to $55.09 a barrel, for a third straight day of gains. The benchmark hit a one-year high of $55.26 on Tuesday.
Brent crude futures rose 48 cents, or 0.84%, to $57.94 U.S. a barrel, for a fourth day of gains after hitting $58.05 on Tuesday, the highest since January last year.
Analysts said the market was buoyed by the latest assessment by OPEC and allies, together known as OPEC+, that oil stockpiles will decline to below a five-year average by June.
That showed the producers’ output cuts were succeeding in bringing the market back into balance.
OPEC+ expects output cuts will keep the market in deficit throughout this year, peaking at two million barrels per day in May, even though it revised down its outlook for demand growth.
A ministerial meeting will convene on Wednesday, although it is not expected to recommend any adjustments to oil output policy.
Further supporting the market, industry data after the market closed on Tuesday showed U.S. crude and gasoline inventories fell unexpectedly.
The American Petroleum Institute reported U.S. crude oil inventories fell by 4.3 million barrels in the week to Jan. 29, compared with analysts’ expectations in a Reuters poll for a build of 446,000 barrels.
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