Oil prices on Thursday, extended gains after rising % in the last session.
This happened because the bullish forecasts of recovering demand outweighed concerns about the impact of the increasing covid cases in Brazil, India and Japan.
Brent Crude went up to 8 cents or 0.1%. It reached $ 67.35 a barrel by 0104 GMT. On the other hand, the U.S. West Texas Intermediate crude for June was at $63.98 a barrel. It went up to 12 cents or 0.2%.
The Organization of the Petroleum Exporting Countries (OPEC) along with Russia and their allies form a group called OPEC+.
This group plans for the gradual facilitation of oil production restrictions from May to July. After OPEC would increase its demand growth slightly for 2021 to 6 million barrels per day, this plan would take place.
In July, the group expects global stocks to reach 2.95 billion barrels per day. This would take them below the 2015-2019 average.
Citi analysts said, “A closer look at the state of global oil inventories suggests that the market may be closer to the point of rebalancing than what OPEC+ may think,”.
Furthermore, the Citi analysts added that a lot of crude inventory outcropping has been captivated by the market. Still, refined products inventories would need to be worked off.
According to the Citi Bank, vaccination campaigns in North America and Europe are likely to boost the oil demand.
Probably, the demand would reach a height of 101.5 million bpd this summer. But the constant rise in COVID cases in India and Brazil might hit the local demand if deeper lockdowns are re-imposed.
On Wednesday, the Energy Information Administration released data regarding this. It stated that the investors are focused on a ramp-up in US refinery operating rates.
Just last week, the US crude inventories rose by 90,000 barrels. But it was much less than the 659,000-barrel build, expected by the analysts’ forecasts.
