Oil prices on track for eight-week high on demand hopes
Oil prices rose more than 1% on Wednesday, putting the contracts on track for their highest close in almost eight weeks, as U.S. crude exports plunged and on signs of a speedy economic recovery and upbeat forecasts for energy demand.
Brent futures rose 74 cents, or 1.1%, to $69.29 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 75 cents, or 1.2%, to $66.03.
That puts both benchmarks on track for their highest closes since March 11. Earlier in the session, WTI on track for its highest close since Oct. 29, 2018 and Brent for its highest close since May 28, 2019.
U.S. crude exports fell last week to around 1.8 million barrels per day (bpd), their lowest since October 2018, while crude inventories declined 0.4 million barrels versus an expected 2.8 million-barrel draw, according to weekly government data.
Traders noted one factor weighing on prices this afternoon was the U.S. inventory report also showed total oil products supplied fell 2.2 million bpd to 17.5 million bpd. That was their biggest weekly decline and the lowest weekly demand since January.
The International Energy Agency (IEA) said in its monthly report that oil demand is already outstripping supply and the shortfall is expected to widen even if Iran boosts exports.
Similarly, the Organization of the Petroleum Exporting Countries on Tuesday stuck to a forecast for a strong recovery in world oil demand in 2021, with growth in China and the United States outweighing the impact of the coronavirus crisis in India.
Reference: CNBC
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