Oil rose for a second day on Wednesday on signs of strong demand from refineries in China, the world’s second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
International benchmark Brent crude oil futures rose 21 cents, or 0.29 percent, to $71.93 a barrel by 0319 GMT. Brent gained as much 0.5 percent to 72.08 a barrel, the highest since Nov. 8 and the highest this year.
U.S. West Texas Intermediate (WTI) crude futures were at $64.45 per barrel, up 40 cents, or 0.6 percent from their previous settlement.
“Crude oil futures edged up as market sentiments were buoyed by a surprise drawdown in U.S. crude oil inventories and tighter market fundamentals in the current term,” said Benjamin Lu, commodities analyst at Singapore-based brokerage Phillip Futures.
China’s refinery throughput in March rose 3.2 percent from a year earlier to 53.04 million tonnes, or 12.49 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday.
The steady demand growth in China is occurring as a deal between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to limit their output by 1.2 million bpd in 2019 has curtailed global supplies.
Crude oil supply has also declined in 2019 as the United States an imposed economic sanctions on OPEC members Venezuela and Iran.
The tightening supply and demand fundamentals have pushed WTI up more than 40 percent this year and Brent up by more than 30 percent.
In June, OPEC and its partners will decide whether to continue to curb their production, although concerns have arisen over Russia’s willingness to stick with the cuts.
Gazprom Neft, the oil arm of Russian gas company Gazprom, expected the global oil deal between OPEC and its allies to end in the first half of the year, a company official said on Tuesday.
“As the possibility of Russia ending the OPEC deal remains, that is capping further gains,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
An unexpected fall in U.S. crude inventories also supported higher oil prices.
U.S. crude inventories fell by 3.1 million barrels in the week ended April 12 to 452.7 million, compared with analysts’ expectations for an increase of 1.7 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday.
Official data on U.S. inventories from the Energy Information Administration (EIA) is due to be released on Wednesday.