By Adedapo Adesanya
Oil prices rose more than one per cent on Thursday on reports that implied petroleum products demand in the United States had risen to record heights.
This pushed the Brent crude futures higher by 88 cents or 1.19 per cent to trade at $74.76 per barrel and raised the West Texas Intermediate (WTI) crude higher by $1.17 or 1.65 per cent to sell at $72.04 per barrel.
US implied petroleum products demand rose to 23.191 million barrels per day for the week ending December 10, according to the Energy Information Administration (EIA).
The previous record was set during week ending August 27 of this year, which reached fresh highs of 22.820 million barrels per day.
The increase in demand for petroleum products inspired fresh optimism in the market, as uncertainty in the markets faded after the Federal Reserve’s announcement on Wednesday.
Lending further price support, the EIA also reported that US crude stocks fell 4.6 million barrels, more than analysts had forecast.
Prices also got a boost after the US Federal Reserve gave an upbeat economic outlook, lifting investor confidence even as the US central bank flagged a long-awaited end to monetary stimulus.
In Saudi Arabia, crude oil exports in October rose for a sixth straight month to their highest since April 2020, the Joint Organisation Data Initiative (JODI) said on Thursday.
However, the market’s gains were limited by worries about the virus and the prospect of a supply surplus next year.
The International Energy Agency (IEA) forecast revised down its outlook by 100,000 barrels per day for both the remainder of this year and 2022.
In its Oil Market Report, the IEA said global oil demand was now expected to rise by 5.4 million barrels per day in 2021 and 3.3 million barrels per day in 2022 to hit pre-pandemic levels of 99.5 million barrels per day globally.
The IEA added that while the rise in new COVID cases was expected to slow demand, the recovery that is already underway was not expected to be completely derailed.
The IEA’s outlook conflicts slightly with expectations from the Organisation of the Petroleum Exporting Countries and allies (OPEC+) which put out its own report on Monday and was more optimistic than the IEA on demand recovery next year.
OPEC+ predicted that the Omicron variant would have a mild impact on oil markets, and said it expects demand to reach 100 million barrels per day by the third quarter of 2022. It also raised its demand forecast for the first quarter of 2022 by 1.1 million barrels per day.
Modupe Gbadeyanka