© Reuters. Oil is up about 5%, indicating growing demand
By Stephanie Kelly
NEW YORK (Reuters) – Wednesday rose about five percent amid optimism over a return to demand, quoted by an International Energy Agency report, followed by inventory data from US, after anti-Crown virus outages affected fuel consumption last year.
Crude oil futures rose $ 2.91, equivalent to 4.6 percent, to determine the settlement price at $ 66.58 a barrel. West Texas Intermediate Crude closed at $ 2.97, or 4.9 percent, at $ 63.15.
U.S. crude inventories fell 5.9 million barrels last week, according to the U.S. Energy Information Administration, while analysts had expected a drop of just 2.9 million barrels. East Coast stocks hit a record low.
Gasoline supplies for the most recent week, an indicator of U.S. fuel consumption, rose to 8.9 million barrels a day, the highest level since August, according to a report from the U.S. the information.
Gasoline inventories increased 309,000 barrels, while 786,000 barrels were expected to increase. Distillate stocks fell 2.1 million barrels over the week, compared to expectations of an additional 971,000 barrels.
“Overall, it was a very supportive report,” said Phil Flynn, chief analyst at Price Futures Group in Chicago. “It looks like we’re really getting a slightly stronger demand again.”
Earlier in the session, oil prices rose due to a report by the International Energy Agency expecting a balance of oil supply and demand in the second half of the year. The report added that producers could have to pump an additional 2 million barrels a day to meet expected demand.
“This IEA report is among the best recently published in terms of optimism about the continued recovery in demand,” said John Kilduff, a partner at Again Capital in New York.
Similarly, the Organization of the Petroleum Exporting Countries on Tuesday increased its global demand forecast by 70,000 barrels per day according to last month’s estimates and now expects global demand to grow 5.95 million barrels per day in 2021 .
Signs of a strong economic recovery in China and the United States support recent price gains, but the slow distribution of vaccines around the world and the growth of Covid-19 cases in India and Brazil are holding back the market.
(Report by Julia Payne in London, Sonali Ball in Melbourne and Ruslan Khasawneh in Singapore; Ahmed Elhami prepared for the newsletter in Arabic)
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