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UPDATE 9-Oil gains as U.S. fuel stocks drop, OPEC+ considers deal rollover

Published 03/03/2021, 05:06
Updated 03/03/2021, 21:06
© Reuters.

© Reuters.

* OPEC+ may roll over output levels for April, sources say
* U.S. expects vaccines for all adults by end of May
* U.S. crude stocks rose unexpectedly last week

(Updates with settlement prices; adds commentary)
By Stephanie Kelly
NEW YORK, March 3 (Reuters) - Oil prices rose more than 2%
on Wednesday, boosted by a huge drop in U.S. fuel inventories
and expectations that OPEC+ producers might decide against
increasing output when they meet this week.
U.S. gasoline stocks USOILG=ECI fell last week by the most
on record and refining output fell to a record low in the wake
of a deep freeze in Texas that shut production.
Gasoline inventories fell to 243.5 million barrels, the U.S.
Energy Information Administration said, while distillate
stockpiles USOILD=ECI fell by the most since 2003 to 143
million barrels.
"It was a giant storm," Bob Yawger, director of energy
futures at Mizuho, said of the Texas freeze. "It shut down every
refinery in refinery row, basically, that mattered and it froze
in production."
Crude inventories USOILC=ECI rose by 21.6 million barrels,
the most on record, to 484.6 million barrels, EIA said. Refining
capacity use fell to just 56% of overall capacity, the lowest on
record, as the U.S. Gulf Coast's refining capacity use plunged
to 40.9%, the lowest ever.
Brent crude LCOc1 rose $1.37, or 2.2%, to settle at $64.07
a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 rose
$1.53, or 2.6%, to settle at $61.28 a barrel.
Earlier, oil prices jumped after Reuters, citing three
sources, reported that the OPEC+ group comprising the
Organization of the Petroleum Exporting Countries and allies
including Russia is considering rolling over production cuts
from March into April rather than raising output.
The group had previously been widely expected to ease the
production cuts on Thursday.
Kuwaiti Oil Minister Mohammad al-Fares said the market was
being supported by optimism over vaccinations. Also positive for prices, U.S. President Joe Biden said the
United States would have enough COVID-19 vaccines for every
American adult by the end of May after Merck & Co agreed to make
rival Johnson & Johnson's vaccine. Biden said he hoped that the United States would be "back to
normal" at this time next year and potentially sooner.

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