By Gina Lee
Investing.com – Oil was up Thursday morning in Asia, after the Organization of the Petroleum Exporting Countries and allies, or OPEC+, vowed to continue with a reduced output policy at a meeting on Wednesday. The U.S. also reported a draw in crude oil supplies.
Brent oil futures edged up 0.14% to $58.77 by 11:18 PM ET (4:18 AM GMT), after hitting their highest level since Feb. 21, 2020 on Wednesday. WTI futures were up 0.68% to $56.07 after hitting its highest settlement level in a year on Wednesday.
“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,” OANDA senior market analyst Edward Moya told Reuters.
OPEC+ extended its current oil output policy during a meeting of its Joint Ministerial Monitoring Committee on Wednesday. The cartel’s decision indicates that efforts to reduce inventory will continue even as the COVID-19 pandemic lingers and the outlook for fuel demand remains uncertain. It is also an indication that OPEC+ is starting to unwind the unprecedented production cuts it implemented in 2020, which helped oil rally from record lows.
Also giving the black liquid a boost was Wednesday’s data from the U.S. Energy Information Administration that showed a draw of 994,000 million barrels. Forecasts prepared by Investing.com had predicted a 446,000-barrel build, and a 9.190-million-barrel draw was recorded during the previous week. Crude oil stockpiles in the U.S. are now at their lowest levels since March.
Tuesday’s data from the American Petroleum Institute showed a draw of 4.261 million barrels for the week ending Jan. 29.
Continued progress in rolling out COVID-19 vaccines globally is also an important driver of oil prices, OANDA’s Moya said.
“The world now has several effective vaccines that should really force energy traders to upgrade their return to per-pandemic behavior forecasts,” he added.