Oil climbs to fresh 6-week high on bullish demand
Oil prices extended gains on Thursday after rising 1% in the previous session, as bullish forecasts of recovering demand outweighed concerns about the impact of rising COVID-19 cases in Brazil, India and Japan.
Brent futures rose $1.29, or 1.9%, to settle at $68.56 a barrel.
U.S. West Texas Intermediate (WTI) crude rose $1.15, or 1.8%, to end at $65.01.
That put both benchmarks up for a third day in a row to their highest closes since March 15.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, stuck to its plans this week for a gradual easing of oil production curbs from May to July.
OPEC+ expects global stocks to reach 2.95 billion barrels in July, taking them below the 2015-2019 average.
“A closer look at the state of global oil inventories suggests that the market may be closer to the point of rebalancing than what OPEC+ may think,” Citi analysts said, adding that the market has absorbed most of the crude inventory overhang, although refined products inventories are still relatively high.
The bank expects vaccination campaigns in North America and Europe to boost oil demand to a record high of 101.5 million barrels per day (bpd) over the northern hemisphere summer months, but said rising COVID-19 cases in Brazil and India could hit local demand if stricter lockdowns are reimposed.
“The outbreak in India is holding back oil’s rally,” Howie Lee, an economist at Singapore’s OCBC bank, said.
Marathon Oil raises quarterly dividend by 33%, cuts debt
Marathon Oil Corp on Thursday became the latest U.S. oil producer to raise its quarterly dividend as COVID-19 vaccine rollouts and increased travel demand lift crude prices.
Reference: CNBC, Reuters
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