The international oil benchmark, Brent crude, reached its highest in six weeks on Thursday as strong US economic data, a weak dollar and overall expected recovery in demand outweighed worries about the impact of increased COVID-19 cases in Brazil and India.
Brent crude rose by $1.2 to $68.47 per barrel by 6:59pm Nigerian time, while the United States West Texas Intermediate rose by $1.07 to $64.93 per barrel, according to Energy Intel.
Reuters reported that oil prices had maintained an increase for three consecutive days.
The increase in US oil demand came amid the market’s assessment of improved economic conditions, as per a US Energy Information Administration report, said S&P Global Platts.
The head of commodities strategy at ING Group, Warren Patterson, and a senior commodities strategist, Wenyu Yao, were quoted as saying, “While demand appears to be trending in the right direction in the US, there are still clear concerns over the impact that the surge in COVID-19 cases in India is having on fuel demand.”
As the Organisation of the Petroleum Exporting Countries and its allies are set to increase production in May, with plans to boost production by two million barrels per day over the next six months, they also expect the global stockpile to reach 2.95 billion barrels in July, effectively sending it above the four-year average between 2015 and 2019.
“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,” analysts at Citibank were quoted by Reuters as saying.
They also added that the oil market had absorbed most of the threats to oil price stability, stressing even further that it was more than OPEC+ had projected.