OIL FUTURES: WTI hits 1-year high following US crude draw

New York — Crude oil futures again settled near one-year highs Feb. 3 on the back of falling US inventories and improved demand outlooks.

NYMEX March WTI settled 93 cents higher at $55.69/b, and ICE April Brent climbed $1 to $58.46/b.

US commercial crude stocks fell 990,000 barrels to 475.57 million barrels in the week ended Jan. 29, US Energy Information Administration data reported Feb. 3. The draw was well under market expectations; however, the counter-seasonal decline was concentrated at the NYMEX delivery point of Cushing, Oklahoma, and left nationwide inventories less than 5% above the five-year average, the narrowest supply overhang since the week ended April 3.

ANALYSIS: Counter-seasonal US crude draw extends amid stronger exports, refinery utilization

"Crude's fundamentals continue to support higher prices," OANDA senior market analyst Edward Moya said in a note. "For oil to steadily rise, stockpiles across the US and China need to continue to fall and so far, they have been.

"The crude demand outlook has been mixed since COVID vaccine rollout has been disappointing in Europe and improving in the US. Now that more COVID vaccines have posted strong efficacy numbers, confidence is the crude demand outlook will improve dramatically in the second quarter."

Front-month Brent and WTI last settled higher on Feb. 21, 2020, and Jan. 22, 2020, respectively.

NYMEX front-month March RBOB climbed 3.26 cents to settle at $1.6486/gal, and March ULSD was up 1.59 cents at $1.6905/gal.

No further OPEC+ cuts recommended

OPEC+ ministers concluded a speedy monitoring committee meeting Feb. 3 with an upbeat assessment of the oil market.

Oil inventories have declined for five straight months, and the continued progress in developing and deploying coronavirus vaccines offers hope for the global economy, the OPEC+ Joint Ministerial Monitoring Committee said in a post-meeting communique, making no recommendations for any changes to the alliance's production cut accord.

The committee's decision to endorse the status quo punts potentially thorny talks over future quotas to the alliance's next full meeting March 4.

While overall OPEC+ compliance remains high, non-compliance by individual members has become a sticking point in negotiations.

Iraq, the group's leading compliance laggard, produced 3.807 million b/d of crude in January, including output from the semi-autonomous Kurdistan region, the country's State Oil Marketing Organization said Feb. 3, putting it comfortably below its OPEC+ production quota of 3.857 million b/d, which is effective through March.