Futures prices surged on Wednesday, as the International Energy Agency raised its demand outlook for crude and a US government report showed weekly inventories fell on Tuesday, setting price levels. highest since mid-March.
In its monthly report, the International Energy Agency Its prediction enhancement for global oil demand in 2021 an increase of 230,000 barrels / day compared with the previous forecast. It currently sees an increase of 5.7 million barrels a day from 2020 to 96.7 million barrels a day this year.
Phil Flynn, senior market analyst at The Price Futures Group, said in a daily report: “Oil prices could break out of their bad monthly trading range because the IEA is often pessimistic. Looks pretty optimistic. “
On TuesdayThe Organization of Petroleum Exporting Countries has increased its 2021 demand forecast by 100,000 bpd. It expects global oil demand to grow by around 6 million barrels a day to 96.5 million barrels a day this year. OPEC also raised its forecast for global economic growth from 5.1% to 5.4%.
Oil prices respond well to the latest demand updates, which shows higher commodity absorption as the global economy recovers from a pandemic.
West Texas Intermediate crude for May delivery
up $ 2.50, or 4.2%, to trade at $ 62.68 / barrel on the New York Mercantile Exchange, after settling above $ 60 on Tuesday for the first time since day 1 April.
June Brent crude oil global benchmark
up $ 2.51, or 3.9%, at $ 66.18 / barrel on ICE Futures Europe.
Both WTI and Brent crude oil prices are on track to count their highest pre-month contract payments since March 17, FactSet data shows.
In a weekly report also released Wednesday, the Energy Information Administration reported that US crude inventories fell increased by 5.9 million barrels for the week ending April 9. That dragged down supply for the previous two weeks.
On average, analysts polled by S&P Global Platts forecast a 2.9 million barrel decline in crude oil inventories, while American Petroleum Institute on Tuesday According to sources, the report fell 3.6 million barrels.
The EIA data also showed crude inventories at the Cushing storage center, Okla, rose 400,000 barrels a week, while total domestic petroleum production rose 100,000 barrels to 11 million barrels a day.
The EIA reported that gasoline supplies rose 300,000 barrels, while distillate stocks fell 2.1 million barrels for the week. A survey by S&P Global Platts has forecast a 200,000-barrel drop in gasoline supplies, but distillate inventories are expected to increase 700,000 barrels.
Peter McNally, global head of industry, materials and energy at Third Bridge, told MarketWatch. “This is a situation that we are monitoring closely ahead of the summer driving season that kicks off in the US next month.”
Overall, “existing trends – domestic production flat, imports low and demand recovering – continue,” he said. “In fact, total product demand on a seasonally adjusted basis is higher than 2019 levels and second highest on record.”
Meanwhile, oil traders are weighing the outlook for oil demand. This week, the market witnessed evidence of a strong economy recovery in China and the United States, but worries about an increase in coronavirus cases in many parts of the world and the rollout of appropriate vaccines, including suspending Johnson & Johnson deployment
The one-shot remedy also has limitations on rough in-move.
Geopolitical tensions have also helped support the value of crude. Futures prices ended higher on MondayReports that Iran-backed Houthi rebels in Yemen have attacked an Saudi oil facility have intensified tensions in the oil-rich Middle East.