Oil prices rise more than 1% on fuel demand optimism
Oil prices rose nearly 2% on Wednesday, after U.S. distillate inventories posted a large drawdown and refining activity picked up, boosting hopes for rising fuel demand.
The market remained concerned, however, about India’s surging coronavirus cases.
Brent crude futures rose 1.28%, or 85 cents, to settle at $67.27 per barrel. U.S. West Texas Intermediate (WTI) crude futures settled 1.46%, or 92 cents, higher at $63.86 per barrel.
U.S. crude inventories rose by 90,000 barrels last week to 493.1 million barrels, the Energy Information Administration said on Wednesday. Analysts had expected a 659,000-barrel rise.
Distillate stockpiles fell by 3.3 million barrels in the week, and refining capacity use rose to 85.4% on the week.
U.S. bank Goldman Sachs said on Wednesday it expected “the biggest jump in oil demand ever,” at 5.2 million barrels per day (bpd) over the next six months, as vaccination campaigns accelerate in Europe and travel demand climbs.
Goldman said easing international travel restrictions in May would hike jet fuel demand by 1.5 million bpd.
OPEC+ this week decided to stick to plans for a phased easing of oil production restrictions from May to July, an indication that the group is confident that global demand will recovery.
Reference: CNBC
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