Oil rises after OPEC + sustains oil production cuts, pulling U.S. stocks

SINGAPORE (Reuters) – Oil prices extended gains Thursday after OPEC + alliance of major producers adhered to lower production policy, and as crude stocks in the United States fell to their lowest levels since March last year.

Brent crude futures gained 47 cents, or 0.8%, to $ 58.93 a barrel, before 0317 GMT, after peaking since February 21, 2020 following the OPEC + decision.

U.S. West Texas Intermediate (WTI) crude futures climbed 49 cents, or 0.9%, to $ 56.18 a barrel after reaching the highest settlement rate in a year on Wednesday.

“Crude prices have been rising higher now that OPEC + has demonstrated to the energy market that they are committed to accelerating market rebalancing without delay,” said Edward Moya, senior miner. market analyst at OANDA.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC +, expanded the conventional oil production policy at Wednesday’s meeting, a sign that producers are pleased that their deep supply cuts are draining investments despite a view uncertain to overcome in demand as crown pandemic disease.

A document seen by Reuters on Tuesday showed that OPEC expects the product cuts to keep the market in deficit throughout 2021, even if the agency cuts the forecast on demand.

Also supporting prices, U.S. crude oil stocks fell 994,000 barrels last week to 475.7 million barrels, their lowest level since March, the U.S. Energy Information Administration said Wednesday. Analysts in a Reuters poll had forecast a 446,000-barrel increase.

Continued progress in the distribution of COVID-19 vaccines is also an important driver of oil prices, Moya said OANDA.

“There are a number of effective COVID vaccines in the world that should really force energy traders to return to predicting pre-pandemic behavior,” he said.

The market was also bolstered by news that Democrats in the U.S. Congress took the first steps toward advancing a $ 1.9 trillion coronavirus support plan proposed by President Joe Biden.

In a separate development, the United States has filed a lawsuit to seize oil cargo it claims to have originated in Iran rather than Iraq, as stated on the looting bill, and is in violation of U.S. terrorism rules.