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Oil prices made great gains on Wednesday on the back of falling U.S. inventories and stronger demand.
At 3:30 p.m. ET, WTI spot prices were up $2.70 per barrel, or 4.49% on the day at $62.88. Brent crude was trading at $66.37 per barrel, also up $2.70, or 4.24%.
Oil futures are set to finish out Wednesday with the highest finish since March.
The significant price increase comes on EIA reports of shrinking U.S. crude oil inventories, along with higher crude oil demand outlooks from OPEC earlier in the week and the International Energy Agency today.
In Tuesday’s Monthly Oil Market Report, OPEC increased its 2021 global oil demand outlook by 190,000 bpd. Today, the IEA increased its global oil demand outlook by 230,000 from its previous report. When taken with the EIA’s report of crude inventories that fell by 5.9 million barrels, strong economic data in China, and geopolitical tensions rising in Russia/Ukraine and Israel/Iran, the overarching sentiment in the oil market is particularly bullish, even though U.S. crude inventories are still above the five-year average for this time of year, at 492.4 million barrels.
According to OPEC, 2021 global oil demand is now expected to average 96.46 million bpd. The IEA is now estimating that global oil demand will average 96.7 million bpd, it said in its April report published Wednesday, on the back of improved economic forecasts and the outlook for accelerating vaccination programs.
At 4:30 p.m., ED, the May 2021 futures contract was trading hands at $62.94, up from the prior settlement of $60.18. For WTI and Brent, prices for the front-month contract settlements are the highest since March 17.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.