Crude Oil Prices Inched Higher over Improve Demand Outlook
Crude oil prices increased on Friday over an improved demand outlook as the global economy heals strongly from the pandemic stings, and forecasted demand surge in the United States among others.
International benchmark Brent crude traded at $71.42 on Friday, posting more than a 0.09% increase from Monday when trade registered at $71.35 per barrel. American benchmark West Texas Intermediate (WTI) traded at $68.97 at the same time on Friday, rising over 0.16% relative to $61.87 a barrel on Monday.
Oil prices started the week on an optimistic sentiment on the back of positive economic data from the world’s largest oil consumers, China and the US. Brent has sat just below $72 a barrel and WTI has reached its highest level since October 2018.
Meanwhile, crude prices have been on an upward trend since last week and WTI reached 2-year-high levels as the investors were hopeful that the oil demand will continue rising ahead of the summer driving season.
The disciplined production policies of the major oil-producing countries also contribute to the stability of the market as the Organisation of Petroleum Exporting Countries and allies (OPEC+) agreed to implement their previously-agreed output quota to incrementally increase production until the end of July.
While a rising output at a time when the market needs fewer barrels in line with pandemic-hit demand, the optimistic discipline of the group and their expectation for a higher oil demand during the second half of the year are encouraging the investors.
Another positive stimulus for the oil markets is the pace of the vaccination campaigns which are expected to get wider after the World Health Organization announced on Monday that it validated the Chinese COVID-19 vaccine for emergency use, “giving countries, funders, procuring agencies and communities the assurance that it meets international standards for safety, efficacy and manufacturing.”
Adding more to the optimism for rising oil demand, US crude stocks fell by more than expected last week.
US commercial crude oil inventories fell by 5.1 million barrels, or 1%, to 479.3 million barrels, relative to the market expectation of a fall of 2.1 million barrels, according to data released by the country’s Energy Information Administration (EIA) on Wednesday.
Falling US crude stocks also helped the prices, which is also interpreted as rebounding oil demand ahead of the summer driving season.
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US commercial crude oil inventories fell by 5.1 million barrels, or 1%, to 479.3 million barrels, relative to the market expectation of a fall of 2.1 million barrels, according to data released by the country’s Energy Information Administration (EIA) on Wednesday.
Crude Oil Prices Inched Higher over Improve Demand Outlook
