Oil jumps to one-year high with depleting supplies aiding rally

Oil jumps to one-year high with depleting supplies aiding rally

Oil extended gains in Asia after closing at the highest level in more than a year as declines in U.S. and Chinese crude stockpiles gave fresh impetus to a rally driven by tightening global supplies.

Futures in New York traded near $55 a barrel after jumping almost 5 per cent over the previous two sessions in tandem with a broader rally in financial markets. The American Petroleum Institute reported crude inventories fell by 4.3 million barrels last week, people familiar with the data said. Chinese stockpiles have dropped to the lowest in almost a year, according to data provider Kayrros.

OPEC+ said it expects that it will drain an oil surplus by the middle of the year. There were also more signs of strength in the physical market, with Royal Dutch Shell bidding for more cargoes of benchmark-grade North Sea crude on an S&P Global Platts pricing window. That comes a day after the oil major staged the heaviest buying by a single company since at least 2008.

Saudi Arabia's pledge last month to unilaterally cut output in February and March has buttressed global oil markets, allowing prices to keep rising even as a resurgent coronavirus hurts the short-term demand outlook. It's