Oil prices rose on Wednesday to hover near 11-month highs as expectations of tighter supply outweighed pandemic-related concerns.

An unexpected draw in U.S. crude and gasoline stocks also fueled hopes for demand recovery.

Brent crude for April settlement rose 0.4 percent to $58.02 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 0.8 percent at $55.1.

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.

Gasoline stocks and distillate inventories also fell, bolstering hopes of a recovery in the fuel demand.

Oil cartel Opec and its allied producers, including Russia has forecast that the market will be in deficit in 2021.

Investors look ahead to the OPEC Joint Ministerial Monitoring Committee (JMMC) meeting scheduled for today and the release of the EIA crude oil inventory report for further direction.

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

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