LONDON (Reuters) – Never seen oil prices Little changed on Thursday after strong gains in the previous two sessions thanks to expectations of higher fuel demand later in the year, while major producers maintained their supply plan.
By 09:52 GMT, Brent crude futures rose 12 cents, or 0.17 percent, to $ 71.47 a barrel, after touching its highest level since September 2019 at $ 71.99. The global benchmark rose 1.6 percent on Wednesday.
US West Texas Intermediate crude futures rose eight cents, or 0.12 percent, to $68.91. Prices rose as much as $69.40, the highest since October 2018, after increasing 1.5 percent in the previous session.
Market forecasters, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies within the OPEC+ group, agree that oil demand will exceed supply in the second half of 2021.
OPEC + data shows that by the end of the year, the demand for oil will reach 99.8 million barrels per day, compared to the supply of 97.5 million barrels per day.
This rebalancing is expected to be led by a recovery in demand in the United States, the world’s largest oil user, and also in China, the world’s second largest consumer, and Britain as it exits the round of lockdown measures linked to Covid-19.
“The driving season in the US is a period of higher-than-normal fuel consumption,” Vivek Dhar, a commodities analyst at the Commonwealth Bank, said in a note. UK traffic is now well above pre-pandemic levels…we are seeing a continued recovery in oil demand led by the US, Europe and China.”
Crude stocks in the United States fell by more than five million barrels last week, according to what two market sources said, citing figures from the American Petroleum Institute on Wednesday.
On Tuesday, OPEC+ agreed to press ahead with plans to ease supply restrictions until the end of July.
Its meeting lasted 20 minutes, the fastest in the group’s history, indicating strong compliance among members and a conviction that demand will recover once there are signs that the pandemic is abating.
A slowdown in talks between the United States and Iran over Tehran’s nuclear program has also lowered expectations that Iranian oil supplies will return to the market this year.