During Tuesday’s session, WTI crude oil prices have risen very slightly and have continued to swing around the $60 range.
The oil continues uphill, and WTI is up 1.10% on Wednesday. It reached $61.28, the highest level since April 4. It is trading around $61.10, holding on to recent gains.
A combination of factors helped the commodity prolong this week’s bullish move. Among these is the Organization of the Petroleum Exporting Countries (OPEC), raising its forecast for world oil demand for 2021 by 100,000 BPD. The International Energy Agency also raised its forecast for annual demand by 230,000 BPD to 5.7 million BPD.
Another factor was the American Petroleum Institute report, which reported crude stocks falling more than estimated by 3.6 million barrels during the week ending April 9.
The weakness of the dollar, combined with the positive climate in the stock markets, is another factor that favors the upward trend of oil.
However, concerns about rising US oil production and rising supply from Iran could prevent more aggressive hikes. Besides, in some countries, the number of infected by the coronavirus increased. It would lead to more restrictions on activities affecting the oil prices negatively.
Today, the official weekly report of the US Energy Information Administration will be released. Besides, the Federal Reserve Chairman, Jerome Powell, will speak. Furthermore, the Fed will publish the Beige Book on the economy’s state.
OPEC Raises Forecast for World Oil Demand to 5.95 Million BPD
In its latest monthly report, the Organization of the Petroleum Exporting Countries reported its projection for world oil demand in 2021. The OPEC raised its forecast to 5.95 million BPD compared to the last estimate of 5.89 million BPD. Most of the 2021 oil consumption growth should occur in the second and third quarters of the year.
The upward revision is due to a stronger-than-expected economic rebound. It is based on the assumption that most of the population in advanced economies will receive vaccination by the second semester. So, the pandemic will not pose a significant obstacle for emerging and developing economies.
Also, households’ forced saving during closures is forecast to accelerate global economic growth with a rebound in consumption, especially in China and the United States.
On the other hand, the organization believes that Fiscal stimulus programs will foster industry and infrastructure growth. Besides, demand for agricultural products will increase.