By Adedapo Adesanya
Crude oil prices continued their positive movement on Thursday as the market held on to improved upgraded forecasts for demand as major economies recover from the coronavirus pandemic.
The price of the Brent crude futures improved by 0.36 per cent or 24 cents to trade at $66.82 per barrel, while the West Texas Intermediate (WTI) crude futures rose by 0.49 per cent or 31 cents to sell at $63.46 per barrel.
The increase in the value of the commodity was supported by the shrinking of crude oil inventories in the United States as well as higher crude oil demand outlooks from the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
The US crude inventories were down by 5.9 million barrels last week, the EIA data showed, more than double analysts’ expectations for a 2.9 million barrels decline.
This was further supported around the premise of improved oil demand as OPEC in its Monthly Oil Market Report increased its 2021 global oil demand outlook by 190,000 barrels per day
The IEA, on its part, increased its global oil demand outlook by 230,000 barrels per day from its previous report.
According to OPEC, the 2021 global oil demand is now expected to average 96.5 million barrels per day. The IEA is now estimating that global oil demand will average 96.7 million barrels per day, according to its April report and this would be supported by improved economic forecasts and accelerated vaccination programs.
The market is also holding on to strong economic data from China as the country continues to recover from the impact of the pandemic.
Adding to bullish sentiments are geopolitical tensions rising in Russia/Ukraine and Israel/Iran. According to reports, Russia has commenced a military build-up along its border with Ukraine, as fears mount over a possible escalation in hostilities in the region.
The Eastern European country has in recent weeks amassed tens of thousands of troops as well as tanks and artillery near Ukraine’s eastern border. It also mobilised troops in the annexed Black Sea region of Crimea, which it seized in March 2014.
Between Israel and Iran, the Joe Biden administration in the US wants to revive the accord between Iran and six world powers, which places limits on the state’s nuclear programme in return for relief from punishing economic sanctions.
Israel strongly opposes the nuclear deal and has vowed to stop Iran from building an atomic bomb — a goal Iran has always denied pursuing.
Both countries have long embroiled in a shadowy war, with Israel often striking Iran-allied forces in Syria and since last month, both countries have accused each other of a number of maritime attacks.
Dipo Olowookere