Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices rose more than 2 per cent on Thursday as vaccine rollouts bolstered the global economic outlook, which was supported by a decline of the US Dollar.
This pushed the value of the Brent crude higher by 2.78 per cent or $1.89 to $69.79 per barrel and lifted the West Texas Intermediate (WTI) by 2.65 per cent or $1.71 to $65.15 per barrel.
The global economic outlook has brightened as COVID-19 vaccine rollouts speed up in some countries, pushing improved expectation for the global gross domestic product predicted to return to pre-pandemic levels by the middle of this year.
Futures also climbed yesterday as a result of a decline in the US currency. The greenback is the currency which crude is priced against; its weakness boosts the purchasing power of the holders of other currencies.
The market is in the positives even after crude inventories rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations of an 816,000-barrel rise.
This came as the largest producing nation’s oil industry continued to feel the effects of a winter storm that stalled refining and forced production shut-ins in Texas last month.
Meanwhile, the US House of Representatives has given its final approval to one of the largest economic stimulus measures in American history, a $1.9 trillion COVID-19 relief bill that gives President Joe Biden his first major victory in office.
The market will likely be thrust into more worries as the Organisation of Petroleum Exporting Countries (OPEC) downgraded the outlook for demand for its crude over the next two quarters, in keeping with the group’s plans to keep a tight restraint on supply.
The cartel trimmed estimates for the amount of crude it will need to pump in the second quarter by 690,000 barrels a day, amid a weaker picture for demand and stronger growth in rival supply.
The report published on Thursday saw the cartel reduce its overall forecasts for the volume of crude it will need to provide this year.
In its closely watched Monthly Oil Market Report released March 11, OPEC revised up its forecast of 2021 oil demand by 220,000 barrels per day to 96.27 million barrels per day but said the recovery would be backloaded in the second half of the year, after disappointing data in the first quarter.
Estimates for the third quarter and fourth quarter were raised by 400,000 barrels per day and 970,000 barrels per, respectively, while Q1 and Q2 were lowered by 180,000 barrels per day and 310,000 barrels per day.
