WTI rallies into the close, adding over 2% as US inventories fall

• WTI pushes higher on Thursday asOPEC+ agrees to increase its monthly oil quotas.
• US oil inventories fell by 5.1-million barrels last week, well above the 1.3-million-barrel fall.

At $117.53, West Texas Intermediate (WTI) crude is 2.37% higher on Thursday as US oil inventories fell more than expected last week. Traders were also taking into account that OPEC+ agreed to increase its monthly oil quotas that most of its members cannot meet.

Bulls moved in again when the Energy Information Administration reported US oil inventories fell by 5.1-million barrels last week, well above the 1.3-million-barrel fall that markets are positioning for ahead of the announcement. Meanwhile, analysts at TD Securities explained that the ''rumours that OPEC members are considering to exempt Russia from a production deal, which would open the door for the spare capacity 'Haves' to pump more oil to compensate for the 'Have-Nots', are a distraction from the insurance ban on Russian oil.''

OPEC+ on Thursday said it is raising quotas in July and August by 648,000 barrels per day, up from the 432,000 bpd in previous monthly hikes, to make up for lower Russian supply. 

''While negotiations between Saudi Arabia and the Biden Administration would ultimately determine this course of action, it would represent a swift change in the geopolitical landscape in the Middle East, placing Riyadh at odds with Moscow. Ultimately, this is unlikely to occur in the immediate term, which suggests these rumours will prove to be a distraction from the EU's proposed insurance ban on shipping Russian oil to third countries,'' the analysts explained. 

''We have reiterated that this could create a significant logistical bottleneck for Russian crude exports. This view fits with our return decomposition model, which highlights that energy supply risk continues to soar higher. In this context, we remain long Dec23 Brent crude in anticipation of a continued rise in supply risk premia.''