Oil prices rally strongly on US distillate draw, market shrugs off OPEC+ hikes

London (Quantum Commodity Intelligence) – Crude oil futures traded at one-week highs Wednesday after the latest round of inventory figures from the Energy Information Administration revealed a sharp draw in US distillate inventories in the week ending April 23.

Brent futures for June were trading at $67.68/barrel in late London trading at (1546 GMT), compared to Tuesday's settle of $66.42/b, an increase of nearly 2% on the day.

At the same time, June WTI was trading at $64.47/b, up $1.53/b from Monday's settlement of $62.94/b.

The EIA report said distillate stocks fell by 3.3 million barrels last week to 139 million barrels, outstripping analyst estimates of a 600,000-barrel draw.

Commercial stocks of crude rose 90,000 barrels to 493.1 million barrels, while gasoline stocks rose by 100,000 barrels to 235.1 million barrels, the agency said.

Earlier in the session prices were drifting, as concerns over tumbling Indian demand at a time when the OPEC+ producers are gradually increasing output had dampened sentiment.

Meanwhile, Goldman Sachs maintained its bullish outlook for commodities in the post-pandemic rebound, saying it expects global commodities markets to rally by another 13.5% over the next six months, according to a research note Wednesday.

The US bank now expects North Sea Brent prices to reach $80/b during the next six months, while US WTI is seen $77/b over the same time period.