By Adedapo Adesanya
The Brent crude reached the $69 per barrel region on Wednesday after it appreciated by 74 cents or 1.1 per cent to trade at $69.13 per barrel.
This was strengthened by the speedy economic recovery and optimistic forecasts for energy demand strengthened the oil market.
This also consequently pushed the West Texas Intermediate (WTI) crude futures higher by 75 cents or 1.25 per cent to sell at $66.03 per barrel, signifying an eight-week high for both futures since early March.
Economic data from the United States showed that crude exports fell last week to around 1.8 million barrels per day, their lowest since October 2018, while crude inventories declined by more than 400,000 barrels compared to an expected 2.8 million-barrel draw, according to the Energy Information Administration (EIA).
In its report on Wednesday, crude inventories fell by 427,000 barrels in the last week to 484.7 million barrels.
The market also found support after the International Energy Agency (IEA) reported that oil demand is already outperforming supply and the shortfall is expected to widen even if Iran boosts exports.
The Paris-based agency noted that global oil consumption is now forecast to rise by 5.4 million barrels per day in 2021, 270,000 barrels per day lower than in its previous outlook.
India’s COVID-19 crisis led it to downgrade its demand in the second quarter of the year by 630,000 barrels per day.
It noted that its forecast for the second half of the year is left roughly unchanged based on expectations that vaccination campaigns continue to expand and the pandemic largely comes under control.
This is coming a day after the Organisation of the Petroleum Exporting Countries (OPEC) retained a forecast for a strong recovery in world oil demand in 2021, with growth in China and the US outweigh the impact of the coronavirus crisis in India.
Positive data from the United Kingdom also lent support to the market as the country’s economy recovered with a 2.1 per cent growth in March from February led by the reopening of schools which, alongside COVID-19 testing and vaccinations improved the world’s fifth-biggest economy.
Meanwhile, the market continued to observe the happenings in India where the coronavirus death toll crossed 250,000 after it had its deadliest 24 hours since the pandemic began.
In the US, fuel shortages worsened as the shutdown of the Colonial Pipeline, the nation’s largest fuel pipeline network, entered its sixth day and fuelling stations in some cities ran out of supply.
Colonial, which transports more than 2.5 million barrels per day, said it hopes to restart a large portion of the network by the end of the week after a cyber attack on Sunday.
Modupe Gbadeyanka