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UPDATE 6-Oil rises to near 1-year highs after U.S. stock drawdown

Published 03-02-2021, 10:32 am
Updated 03-02-2021, 10:00 pm
© Reuters.
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* U.S. crude stockpiles fall, gasoline inventories surge -EIA

* OPEC+ maintains oil policy amid price rally

* OPEC+ sees oil market deficit throughout 2021 (Adds U.S. inventory data, updates prices, market activity, commentary; changes byline, dateline, previous LONDON)

By Stephanie Kelly

NEW YORK, Feb 3 (Reuters) - Oil prices rose more than 2% to near their highest levels in about a year on Wednesday, after government data showed U.S. crude stockpiles fell to their lowest since March, while OPEC+ maintained its supply cut agreement.

Brent crude LCOc1 futures rose $1.37, or 2.4%, to $58.83 a barrel by 11:05 a.m. EST (1605 GMT), their highest since last February. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.45, or 2.7%, to $56.21 a barrel, their highest since January 2020.

Both benchmarks' backwardation, where contracts for near-term delivery are more expensive than later supplies, were at their highest in just over a year at around $2.30, indicating expectations of tighter supply. LCOc1-LCOc7 CLc1-CLc7

U.S. crude oil stockpiles USOILC=ECI fell last week to 475.7 million barrels, the Energy Information Administration said on Wednesday, their lowest since March. Refiner utilization rates USOIRU=ECI , meanwhile, rose by 0.6 percentage points. are back in business, which is supportive for crude," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "On net, this is a supportive report."

The market has been bolstered by deep supply cuts from the Organization of the Petroleum Exporting Countries and allies, which on Wednesday, maintained their oil output policy.

The day before, a document seen by Reuters showed that OPEC+ expects the oil market to be in deficit throughout 2021, peaking at 2 million barrels per day in May. 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 market was also bolstered by news that Democrats in the U.S. Congress took the first steps toward advancing President Joe Biden's proposed $1.9 trillion coronavirus aid plan without Republican support.

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