Categories: BusinessLatest

Oil Rises to Near One-Year Highs After US Stock Drawdown

Oil prices rose almost 2% on and hovered near their highest levels in about a year, after government data showed U.S. crude stockpiles fell to their lowest since March, while OPEC+ maintained its supply cut agreement.

Brent crude futures rose 91 cents, or 1.6%, to $58.37 a barrel by 1:24 p.m. EST (1824 GMT). The benchmark earlier hit $58.94 a barrel, its highest since last February.

U.S. West Texas Intermediate (WTI) crude futures rose 87 cents, or 1.6%, to $55.63 a barrel, after reaching $56.33, their highest since January 2020.

Both benchmarks’ backwardation, where contracts for near-term delivery are more expensive than later supplies, hit their highest in just over a year at around $2.30, indicating expectations of tighter supply.

U.S. crude oil stockpiles fell last week to 475.7 million barrels, the Energy Information Administration said on Wednesday, their lowest since March. Refiner utilization rates, meanwhile, rose by 0.6 percentage points.

“Refineries are back in business, which is supportive for crude,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “On net, this is a supportive report.”

The market has been bolstered by deep supply cuts from the Organization of the Petroleum Exporting Countries and allies, which on Wednesday, maintained their oil output policy.

The day before, a document seen by Reuters showed that OPEC+ expects the oil market to be in deficit throughout 2021, peaking at 2 million barrels per day in May.

“Underpinning the bullish sentiment are tightening fundamentals. Ahead of today’s ministerial meeting, OPEC+ hinted that global oil stockpiles will decline below the five-year average by June,” PVM analysts said.

The market was also 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.

REUTERS

Follow us on:

AriseNews

Recent Posts

Gbadebo Rhodes-Vivour: Commercialisation Of GMO Seeds Can Take Away Nigeria’s Food Sovereignty, Cause Health Issues

Gbadebo Rhodes-Vivour has condemned the commercialisation of GMO seeds, warning of threats to Nigeria’s food…

11 hours ago

Usyk Defeats Fury on Points in Riyadh to Retain Heavyweight Championship Title

Oleksandr Usyk has secured victory over Tyson Fury in Riyadh, successfully defending his heavyweight championship…

16 hours ago

Albania to Ban TikTok for a Year After Schoolboy’s Death Sparks Concerns

Albania plans a one-year TikTok ban from January after a schoolboy’s death sparks concerns over…

19 hours ago

Suspect Remanded in Custody Over Deadly Attack at German Christmas Market

A suspect accused of killing five people by driving into a crowded Christmas market in…

19 hours ago

US Fighter Jet ShotDown in Red Sea ‘Friendly Fire’ Incident Amid Heightened Tensions

A US Navy F/A-18 Hornet was mistakenly shot down over the Red Sea by the…

19 hours ago

NNPC, Dangote Refinery Slash Petrol Prices to N899 Per Litre Amid Rising Competition

NNPC has reduced petrol ex-depot price to N899 per litre, sparking competition with Dangote Refinery…

20 hours ago