Early on Wednesday, WTI crude oil is trading bullish, buoyed by a decline in US crude stockpiles even as President Biden’s stimulus plan makes progress, giving hopes for a recovery in oil demand in the current year. At the time of writing, WTI crude oil is trading at around $54.96 per barrel.

According the API report which released on Tuesday, crude inventories in the US dropped by 4.3 million barrels during the past week. Economists had forecast a build in stockpiles by 446k barrels instead, and this data surprised traders and supported gains in crude oil.

During the previous session, WTI crude oil rose to the highest levels seen in one year while UK Brent oil hit the highest seen in over 11 months, after strengthening over the past few sessions. Oil markets have been trading optimistic since the beginning of this week as Saudi Arabia’s deeper supply cuts start even as latest news reports indicate greater compliance to crude production curbs by OPEC and its allies.

OPEC+ nations are expected to continue with supply cuts through 2021 with a goal to stabilize markets and normalize the excess crude inventory that has built up globally in the wake of the coronavirus crisis. According to a recent report on Reuters, leading oil producing nations have revised forecasts for oil demand growth lower in 2021 despite the rollout of COVID-19 vaccines.