Oil futures on Wednesday were trading higher after the International Energy Agency’s monthly report lifted its demand outlook for crude and a U.S. report on inventories showed a drop in weekly stockpiles.
In its monthly report the International Energy Agency raised its annual forecast for global oil demand in 2021 by 230,000 barrels a day to an increase of 5.7 million barrels a day. On Tuesday, the Organization of the Petroleum Exporting Countries increased its 2021 demand forecast by 100,000 barrels a day. It expects global oil demand to climb by about 6 million barrels a day to reach 96.5 million barrels a day this year. OPEC also raised its forecast for global economic growth to 5.4% from 5.1%.
Oil prices responded well to the latest demand updates which pointed to higher uptake of the commodity as the global economy recovers from the pandemic.
West Texas Intermediate crude for May delivery
rose 95 cents, or 1.6%, to trade at $61.13 a barrel on the New York Mercantile Exchange, after advancing 0.8% on Tuesday to mark the highest front-month contract finish since April1, which was the last time prices settled above $60, according to Dow Jones Market Data.
Global benchmark June Brent crude
pickedup $1.05, or 1.6%, at $64.72 a barrel on ICE Futures Europe, extending its climb after also putting in its highest settment since the start of April.
Investors will look ahead for a closely followed weekly report on inventories from the U.S. Energy Information Administration, which is expected to show crude inventories down by 2.9 million barrels, according to survey of analysts conducted by S&P Global Platts.
Late Tuesday, the American Petroleum Institute reported that U.S. crude supplies fell by 3.6 million barrels for the week ended April 9, according to sources. The data also reportedly showed gasoline stockpiles up by 5.6 million barrels, while distillate inventories declined by 3 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, were up 917,000 barrels for the week.
During the week, investors have been focused on evidence of a strong economic recovery in China and the United States, but worries about surges in coronavirus cases in parts of the world and a fitful rollout of vaccines, including a pause in the rollout of Johnson & Johnson’s
one-shot remedy has limited moves in crude also.
Geopolitical tensions also have helped support crude values. Oil futures finished higher on Monday, as reports that Yemen’s Iran-backed Houthi rebels attacked a Saudi oil facility lifted tensions in the oil-rich Middle East.