Oil extends gains after OPEC+ maintains oil output cuts, U.S. stock draw

A pump jack stands idle in Dewitt County, Texas. (Reuters)

SULAIMANI (ESTA) — Oil prices extended gains on Thursday after the OPEC+ alliance of major producers stuck to a reduced output policy, and as crude stockpiles in the U.S. fell to their lowest levels since March last year.

Brent crude futures gained 26 cents to $58.72 a barrel by 0537 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed 32 cents to $56.01 a barrel.

“Crude prices have been rising higher now that OPEC+ has convinced the energy market that they are determined in accelerating market re-balancing without delay,” Reuters cited Edward Moya, senior market analyst at OANDA as saying.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, extended its current oil output policy at a meeting on Wednesday, a sign that producers are happy that their deep supply cuts are draining inventories despite an uncertain outlook for a recovery in demand as the COVID-19 pandemic lingers.

U.S. crude oil stockpiles fell by 994,000 barrels last week to 475.7 million barrels, their lowest since March, according to the U.S. Energy Information Administration.

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