Oil prices remain close to one-month high

London — Oil prices eased on Thursday but remained close to a one-month high driven by more positive demand forecasts from the International Energy Agency and oil cartel Opec, as major economies recover from the pandemic.

Brent crude was down 25 US cents, or 0.4%, at $66.33 a barrel by 9.45am GMT, after reaching $66.94 earlier, the highest since March 18.

US West Texas Intermediate futures fell 30 cents, or 0.5%, to $62.85 a barrel, earlier rising to $63.48, also the highest since March 18.

Both contracts rose by about 5% on Wednesday.

“Support is coming from various sides: for one thing, the macro environment remains favourable in terms of the economic outlook, the high risk appetite among investors and the weak US dollar,” Commerzbank said.

The IEA and Opec revised their global oil demand growth forecasts for 2021 higher this week to 5.7-million barrels per day (bpd) and 5.9-million bpd, respectively.

Prices also found support from a big fall in US inventories.

US crude inventories were down by 5.9-million barrels last week, Energy Information Administration (EIA) data showed, with East Coast crude stocks hitting a record low.

“We see robust stock draws even after factoring in bearish risks as refinery runs are set to rise sharply in the coming months,” Citi Research analysts said in a note.

Petrol supplied to the market last week, an indicator of US consumption of the fuel, increased to 8.9-million bpd, the highest since August, the EIA said.

Supply discipline and rebounding economies are set to give oil a chance to break out of the recent range, Goldman Sachs analysts said in a report.

“We remain positive on Brent oil forecasting $80/bbl in the third quarter of 2021 on a near-term demand recovery and supply discipline,” they said.

Reuters