Both benchmark oil contracts were close to their highest in about a year on Wednesday, boosted by a draw in US crude and gasoline stocks, which fuelled demand recovery hopes as OPEC+ has forecast that the market will be in deficit in 2021.
Brent crude futures were up $0.55, or 1%, at $58.01 a barrel at 1245 GMT, their highest in about 11 months.
The contract’s “backwardation” structure, where oil for nearby delivery is more expensive than further forward, was near a one-year high at more than $2, indicating expectations of tighter supply.
US West Texas Intermediate (WTI) crude futures climbed $0.4, or 0.7%, to $55.16 a barrel, having hit a one-year high at $55.28 a barrel earlier on Wednesday.
The market was also bolstered by news that Democrats in the US Congress took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan without Republican support.
The API oil industry association reported US crude oil inventories fell by 4.3 million barrels in the week to January 29.
Gasoline stocks fell by 240,000 barrels, defying analysts’ expectations for a build of 1.1 million barrels. Distillate inventories also fell.
US government inventory data is due at 1530 GMT.
Prices were also buoyed by the latest assessment by the Organisation of the Petroleum Exporting Countries and allies that the oil market could be in deficit throughout this year, a document seen by Reuters on Tuesday showed.
“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 ministerial meeting will convene on Wednesday, although it is not expected to recommend any adjustments to oil output policy.