OPEC+ estimates the oil stockpiles to reduce by June 2021. Credit: D Thory from Pixabay.

Crude oil prices increased after an unexpected fall in the US crude stockpiles and global oil market deficit estimate by OPEC+ for this year.

Brent crude futures rose $0.26, or 0.5%, to reach $57.72 a barrel while the US West Texas Intermediate (WTI) crude futures increased by $0.24, or 0.4%, to reach $55.00 a barrel, reported Reuters.

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According to the latest assessment of the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, oil stockpiles are estimated to reduce by June 2021 to below a five-year average, the news agency reported citing analysts.

The assessment also revealed that the output cuts by major producers were succeeding in balancing the fuel market.

Moreover, OPEC+ expects the output cuts by producers to maintain the market in deficit throughout the year, although it revised down its fuel demand growth outlook, according to a document seen by Reuters.

National Australia Bank commodity research head Lachlan Shaw was cited by the news agency as saying: “The strategy was very clear. OPEC and allies set out to cut a deal that would normalise global excess inventory through 2021; well, they’re on track.”

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According to the American Petroleum Institute, the US crude oil inventories dropped by 4.3 million barrels in the week ending 29 January 2021 compared to that of expectations of analysts for a build of 446,000 barrels in a Reuters poll.

Gasoline stocks reduced by 240,000 barrels compared to analyst expectations of a build of 1.1 million barrels.

In addition, distillate inventories, including heating oil and jet fuel, dropped by 1.6 million barrels.