Listen to this Article Now
Oil advanced for the 3rd day after the IEA lifted its forecasts for demand and an industry report pointed to a different decline in U.S. crude stockpiles.
Futures rose 1.3% in ny and are heading for the longest run of gains in over a month. The International Energy Agency lifted its forecast for oil consumption this year by 230,000 barrels each day amid a stronger outlook for the U.S. and China. It follows an upbeat outlook for demand from OPEC on Tuesday.
The American Petroleum Institute reported crude inventories fell by 3.61 million barrels last week, consistent with people conversant in the info . it’ll be a 3rd straight draw if confirmed by government data Wednesday.
Concerns over near-term fuel demand as a results of surging Covid-19 cases in some major consuming countries ground oil’s sizzling start to the year to a halt in recent weeks. India’s normally bustling streets are deserted, there’s been an interruption within the Johnson & Johnson’s Covid-19 vaccine rollout within the U.S. And Denmark is abandoning AstraZeneca’s shot, all adding renewed headwinds.
But the IEA took a more positive tone on Wednesday. Organization of Petroleum Exporting Countries also said in the week that rising consumption should help to trim stockpiles and also absorb a number of the halted supply the group plans to return to the market over subsequent three months.
“A combination of unprecedented fiscal stimulus and vaccination campaigns will provide a solid base for the oil demand recovery within the latter half this year,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. “The stage is about for a few hefty stock draws.”
While lifting its demand outlook, the IEA also noted the prevailing strength in another key demand hubs. Japan, for instance , saw its oil demand top pre-pandemic levels for the second month during a row in February. Similarly, data from the U.K. showed road use was the strongest since November on Monday.
Meanwhile, in China, the govt is clamping down on independent refiners in an attempt to curb overcapacity and kill illegal practices. A key reason for the probe is to work out whether processors have met Beijing’s demand to shut outdated and polluting equipment, consistent with people conversant in the matter.