Crude oil futures settled nearly 5% higher April 14 on the back of improved global demand forecasts and a larger-than-expected US inventory draw.
NYMEX May WTI settled $2.97 higher at $63.15/b, and front-month ICE June Brent climbed $2.91 to $66.58/b.It was the first time front-month Brent settled above the $65/b level since March 17.
Total US commercial crude oil stocks fell 5.89 million barrels to 492.42 million barrels during the week ended April 9, US Energy Information Administration data showed April 14. It was the largest one-week draw in inventories since the week ended Feb. 12 and narrowed the supply overhang to 1.5% above the five-year average, in from 3.7% the week prior.
NYMEX May RBOB settled 5.98 cents higher at $2.0355/gal, and May ULSD was up 7.55 cents at $1.8900/gal.
While in line with seasonal norms, the US crude draw exceeded analyst expectations. Inventory data released late April 13 from the American Petroleum Institute pegged total US crude stocks 3.61 million barrels lower last week, while an S&P Global Platts survey of analysts April 12 called for a 2.9 million-barrel draw.
"After seeing the EIA crude oil inventory report, OPEC+ members must be very pleased with their gradual output increase strategy.," OANDA senior market analyst Edward Moya said in a note. "It was a very bullish oil inventory report, and that should keep prices supported for the rest of the week."
US implied gasoline demand was the strongest since August after climbing 1.8% week on week to 8.94 million b/d, EIA said. The four-week moving average of gasoline demand climbed for a seventh consecutive week to 8.81 million b/d, and as of last week was 0.4% above the five-year average, marking the first time demand has been above average since the week ended March 20, 2020.
GLOBAL DEMAND OUTLOOK GROWS: IEAThe EIA report added strength an overnight rally sparked by the International Energy Agency revising higher its oil demand estimate for 2021.
Global oil demand is expected to grow 5.7 million b/d in 2021 to 96.7 million b/d, following a collapse of 8.7 million b/d last year, the IEA said.
The EIA increased its US oil demand forecast for the second half of the year by around 365,000 b/d in the light of quick vaccine rollouts and plans for massive economic stimulus spending.
"Oil markets fundamentals look decidedly stronger," the IEA said. "The massive overhang in global oil inventories that built up during last year's COVID-19 demand shock is being worked off, vaccine campaigns are gathering pace, and the global economy appears to be on a better footing."
The IEA also raised its Chinese oil consumption forecast for 2021 by 160,000 b/d. That followed data released April 13 which showed China's crude imports in March were up 21% year on year to 11.74 million b/d, albeit versus a weak March 2020.
