Oil prices rose sharply on Wednesday on the back of falling stocks in the US and stronger demand.
At 3:30 p.m. ET, WTI spot prices rose $ 2.70 a barrel, or 4.49% one day to $ 62.88. Brent crude oil traded at $ 66.37 a barrel, also up $ 2.70 or 4.24%.
Oil futures end on Wednesday with the highest finish since March.
The significant price hike is driven by EIA reports of declining US crude oil inventories, along with a higher crude demand outlook from OPEC earlier this week and the International Energy Agency today.
In Tuesday’s monthly oil market report, OPEC raised its outlook for global oil demand for 2021 by 190,000 bpd. Today, the IEA has raised its outlook for global oil demand by 230,000 from its previous report. When we take into account the EIA report on crude oil inventories down 5.9 million barrels, strong economic data in China and geopolitical tensions mounting in Russia / Ukraine and Israel / Iran, the overarching sentiment in the oil market is particularly optimistic, although stocks at 492.4 million barrels are still above the five-year average for this time of year.
According to OPEC, global oil demand is expected to average 96.46 million barrels per day by 2021. The IEA now estimates that global oil demand will average 96.7 million barrels per day, it said in its April report released Wednesday, based on improved economic forecasts and the outlook for speeding up vaccination programs.
At 4:30 p.m. ED, the May 2021 futures contract in hands traded at $ 62.94, up from the earlier settlement of $ 60.18. For WTI and Brent, the prices for the contract settlement on the first month are the highest since March 17.
By Julianne Geiger for Oilprice.com
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