Crude oil prices moved higher to hit 11-month highs on Wednesday, lifted by the Organization of the Petroleum Exporting Countries and their allies’ decision to cut crude production for two months.

Optimism about additional fiscal stimulus in the U.S., and fairly encouraging momentum in vaccination drive eased concerns about outlook for energy demand.

Data showing a smaller than expected decline in U.S. crude inventories last week limited oil’s uptick.

West Texas Intermediate Crude oil futures for March ended up $0.93 or about 1.7% at $55.69 a barrel.

Brent crude futures were up $0.61 or 1.04% at $58.41 a little while ago.

Data from Energy Information Administration (EIA) showed crude inventories dropped by 994.000 barrels last week.

Gasoline inventories were up by 4.466 million barrels, more than 4 times the expected increase, while distillate stockpiles fell 9,000 barrels in the week, more than twice the expected drop.

The American Petroleum Institute (API) reported on Tuesday that U.S. crude oil inventories fell by 4.3 million barrels in the week ending January 29. Analysts had predicted an inventory build of 446,000 barrels for the week.

Oil cartel OPEC and its allied producers, including Russia have forecast that the oil market will be in deficit this year.

The material has been provided by InstaForex Company – www.instaforex.com

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