Market sentiment was 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.
US West Texas Intermediate crude futures climbed 24 cents, or 0.4%, to $55.00 a barrel, for a third straight day of gains, CNBC reported. The benchmark hit a one-year high of $55.26 on Tuesday.
Brent crude futures rose 26 cents, or 0.5%, to $57.72 a barrel, for a fourth day of gains after hitting $58.05 on Tuesday, the highest since January last year.
Analysts said the market was buoyed by the latest assessment by the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, that oil stockpiles will decline to below a five-year average by June.
That showed the producers’ output cuts were succeeding in bringing the market back into balance. “The strategy was very clear. OPEC and allies set out to cut a deal that would normalize global excess inventory through 2021 - well, they’re on track,” said Lachlan Shaw, head of commodity research at National Australia Bank.
OPEC+ expects output cuts will keep the market in deficit throughout this year, peaking at 2 million barrels per day in May, even though it revised down its outlook for demand growth, a document seen by Reuters on Tuesday showed.