Oil prices rise as OPEC+ maintains output cuts

Washington, Feb. 4, 2021 – Oil prices extended gains on Thursday as the OPEC+ alliance of major producers stuck to a reduced output policy.

The U.S. Energy Information Administration (EIA) reported a crude oil inventory draw of one million barrels for the last week of January.

Benchmark Brent crude for April settlement edged up 0.1 per cent to $58.77 a barrel while U.S. West Texas Intermediate (WTI) crude futures were up 0.7 per cent at $56.10.

As widely expected, the Organisation of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, extended its current oil output policy at a meeting on Wednesday.

Amid uncertain prospects for the global economy, there wasn’t any recommendation about changing the production levels of the alliance.

Ministers led by Saudi Arabia and Russia struck a note of cautious optimism about global oil markets and “stressed the importance of accelerating market re-balancing without delay’’.

Also supporting prices, U.S. crude inventories dropped by 994.000 barrels last week to 475.7 million barrels, their lowest since March, the U.S. Energy Information Administration (EIA) said on Wednesday.

Gasoline inventories were up by 4.466 million barrels, more than four times the expected increase, while distillate stockpiles fell 9,000 barrels in the week, more than twice the expected drop.