Oil rises on falling U.S. crude stocks, OPEC+ estimate of oil market deficit

Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices rise on Wednesday, supported by an unexpected draw in U.S. crude stockpiles and an OPEC+ estimate of a global oil market deficit this year.

Brent crude futures rose 20 cents to $57.66 a barrel at 0547 GMT, for a fourth day of gains after hitting $58.05 on Tuesday, the highest since January last year.

U.S. West Texas Intermediate (WTI) crude futures climbed 17 cents to $54.93 a barrel, for a third straight day of gains.

Market sentiment was bolstered by news that Democrats in the U.S. Congress took the first step toward advancing President’s Joe Biden’s proposed $1.9 trillion coronavirus aid plan without Republican support, Reuters reported.

Reuters cited analysts as saying the market was buoyed by the latest assessment by the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, that oil stockpiles will decline to below a five-year average by June.

“The strategy was very clear. OPEC and allies set out to cut a deal that would normalize global excess inventory through 2021 – well, they’re on track,” said Lachlan Shaw, head of commodity research at National Australia Bank, according to Reuters.

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 inventories fell by 4.3 million barrels in the week January 29.

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