Oil Prices Advance Near $75 as U.S Crude Inventories Decline
Crude oil prices advance near $75 per barrel Wednesday in anticipation of a fall in US crude inventories while significant disagreements persist in Iran talks. Oil is trending around its peak price reported in April 2019 according to market data.
The Organisation of Petroleum Exporting Countries and allies (OPEC+) demand optimism is also supporting the uptrend witness in recent time. This comes along with increased vaccinations across the world, which has reduced lockdown as India appears to be healing fast.
However, OPEC+ has plan to gradually increase output hoping demand will remain strong. The Oil group and International Energy Institute, IEA, forecasted a 6% jump in crude oil demand for 2021.
In the market today, international benchmark Brent crude was trading at $74.55 per barrel at earlier on Wednesday after a 0.75% increase from $73.99 a barrel closed on Tuesday.
Also, the American benchmark West Texas Intermediate (WTI) traded at $72.59 a barrel at the same time, gained 0.65% after ending the previous session at $72.12 per barrel.
The upward movement in prices was mainly driven by expectations of a hefty drop in US crude oil inventories.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 8.54 million barrels in US crude oil inventories relative to the market expectation of a draw of 3 million barrels.
For major oil consumer, a strong inventory decrease implies an uptick in crude demand in the US, assuaging market concerns over falling demand. In addition, there are positive forecasts on recovering demand that also fuel market optimism.
Reiterating its previous forecast that Brent would hit $80 in the third quarter of 2021, Goldman Sachs predicted that Saudi Arabia’s oil production would reach 10 million barrels a day by the end of this year in line with rising demand.
Investors are now awaiting Federal Reserve projections.
The Fed’s two-day meeting that kicked off Tuesday will conclude Wednesday when it will release key macroeconomic projections for economic growth, inflation and employment.
Oil Prices Advance Near $75 as U.S Crude Inventories Decline
