SULAIMANI (ESTA) — Oil prices extended gains on Wednesday after industry data showed U.S. oil inventories declined more than expected and OPEC raised its outlook for oil demand.
Brent crude futures rose 71 cents to $64.38 a barrel at 0554 GMT. U.S. West Texas Intermediate (WTI) crude futures added 69 cents to $60.87 a barrel.
Reuters reported that signs of a strong economic recovery in China and the United States had underpinned recent oil price gains.
However, concerns over stalled vaccine rollouts worldwide and soaring coronavirus infections in India and Brazil have capped gains.
“Continuing setbacks on vaccine rollouts and global cases nearing January’s peak is likely to hold a firm cap on crude’s ascent in the short term. At the same time, persistent optimism over a U.S. recovery and the world being on the cusp of emerging out of the COVID crisis is holding a floor,” Vandana Hari, energy analyst at Vanda Insights, told Reuters.
A weakening U.S. dollar also “provided a mild upward push in recent days but there’s been no major bullish impetus to free crude from its narrow trading range,” she said.
The Organization of the Petroleum Exporting Countries (OEPC) tweaked up its forecast on Tuesday for world oil demand growth this year, now expecting demand to rise by 5.95 million barrels per day (bpd) in 2021, up by 70,000 bpd from its forecast last month, according to Reuters.
“It was a welcome prognosis by the market, which had been fretting about the impact the ongoing pandemic was having on demand,” ANZ Research analysts said in a note.
Further supporting the market, sources said data from the American Petroleum Institute showed crude stocks fell by 3.6 million barrels in the week ended April 9.
