Oil prices rose almost 2% on Wednesday and hovered near their highest levels in about a year, after government data showed U.S. crude stockpiles fell to their lowest since March, while OPEC+ maintained its supply cut agreement.
Brent crude futures rose 1.74% to $58.46 a barrel. The benchmark earlier hit $58.94 a barrel, its highest since last February.
U.S. West Texas Intermediate (WTI) crude settled 1.7% higher at $55.69 per barrel, after hitting a high of $56.33 earlier in the session, the highest level since Jan. 2020.
Both benchmarks' backwardation, where contracts for near-term delivery are more expensive than later supplies, hit their highest in just over a year at around $2.30, indicating expectations of tighter supply.
U.S. crude oil stockpiles fell last week to 475.7 million barrels, the Energy Information Administration said on Wednesday, their lowest since March. Refiner utilization rates, meanwhile, rose by 0.6 percentage points.
"Refineries 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.
"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 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.