After hearing about the improvement in the United States and China’s service sectors, large consumers of crude oil, the oil price rose today.
Increased COVID-19 vaccinations raised prospects for more robust global economic growth. The International Monetary Fund announced unprecedented public spending to fight the coronavirus, especially in the US. Besides, the US reported that crude inventories dropped in the world’s biggest fuel consumer. US job openings surged to a two-year high in February while hiring improved. Services activity in the country touched a record high in March.
On the other hand, China’s service sector registered the sharpest growth in sales in three months.
A barrel of the WTI gained 1.3% to close at 59.50 dollars while the Brent crude rose 1.1% and ended at 62.90 dollars.
For June, Brent crude futures increased by 34 cents, or 0.5%, to $63.08 a barrel. Meanwhile, US West Texas Intermediate crude for May gained 32 cents, or 0.5%, to $59.65.
Lifting Sanctions on Iran Could Hit the Prices
The oil comes from a black day where prices collapsed due to the increase in the supply of crude by OPEC+.
Traders believe the imminent lifting of COVID-19 restrictions in the UK offers investors hope that demand for crude will increase.
Even so, the current market situation is fragile, so a return to the highs of crude prices is not easy.
Iran and world powers held “constructive” talks on Tuesday. They agreed to form working groups to potentially revive the 2015 nuclear deal, leading to the US lifting sanctions on Iran’s energy sector.
The market is awaiting the Vienna meeting by the member countries of the nuclear agreement with Iran. If the sanctions are lifted, it will allow the country to increase supply, which would lower prices.
Us Oil Stockpiles Dropped While Inventories Expanded
US crude oil stockpiles fell in the most recent week. According to three market sources, crude inventories rose, citing American Petroleum Institute figures ahead of government data on Wednesday.
Crude inventories slipped by 2.6 million barrels in the week that ended April 2. Forecasters had expected a fall of just 1.4 million barrels.
According to the energy information administration, the US’s oil production is forecast to fall by 270,000 barrels per day this year to 11.04 million BPD. It’s a steeper decline than its previous monthly forecast for a drop of 160,000 BPD.