Brent gains a fifth day as demand outlook improves, stocks fall

0
19
imageCommodities1 hour ago (Jun 16, 2021 14:50)

© Reuters. FILE PHOTO: A crude oil tanker is seen at Qingdao Port, Shandong province, China, April 21, 2019. REUTERS/Jason Lee/File Photo

By Alex Lawler

LONDON (Reuters) – Oil gained for a fifth day on Wednesday, climbing towards $75 a barrel to its highest since April 2019, supported by a recovery in demand from the pandemic and a drop in U.S. crude inventories.

The American Petroleum Institute reported U.S. crude inventories fell 8.5 million barrels, two market sources said, more than analysts forecast. [API/S] Official Energy Information Administration figures are out at 1430 GMT. [EIA/S]

Brent crude was up 15 cents, or 0.2%, at $74.14 a barrel by 1330 GMT, and earlier reached $74.73, the highest since April 2019. U.S. crude slipped 2 cents to $72.10 having hit $72.83, the highest since October 2018.

“Demand growth is outpacing supply and will continue to do so over the coming months,” said Stephen Brennock of oil broker PVM.

Brent has risen 44% this year, supported by supply cuts led by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and a demand recovery expected to gather pace in the second half. [OPEC/M] [IEA/M]

Despite some easing of last year’s record output cuts made when the pandemic took hold, OPEC+ is still withholding millions of barrels of daily supply from the market.

“Even non-energy traders are placing bets that oil prices will continue to rise,” said Edward Moya, senior market analyst at brokerage OANDA.

Executives from major oil traders said on Tuesday they expected prices to remain above $70 and demand to return to pre-pandemic levels in the second half of 2022.

At the same time, the prospect of an imminent rise in Iranian oil exports looks less likely, analysts said. Indirect talks between Tehran and Washington on resuming the 2015 nuclear accord resumed in Vienna on Saturday.

“Ongoing efforts to revive the Iranian nuclear deal have so far failed to bear any fruits,” PVM’s Brennock said.

Oil hits new high near $75 on demand rise, falling inventories

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

LEAVE A REPLY

Please enter your comment!
Please enter your name here