On April 14, international oil prices rose sharply. The main contract of WTI crude oil futures market in the United States settled at $63.15 / BBL, up $2.97 or 4.9%.Brent crude, the main contract on the market, settled at $66.58 a barrel, up $2.91, or 4.6 percent. Oil prices surged about 5 per cent after the International Energy Agency raised its crude demand forecast, Subsequently, the US Energy Information Administration (EIA) inventory data showed that US crude oil inventories fell for the third consecutive week, boosting people's optimistic expectations of the recovery of energy demand.
Oil prices have traded in a tight range over the past week as the focus continues to be on the unfolding of the epidemic, side effects have slowed progress, with problems at AstraZeneca in the UK and Johnson & Johnson in the US, It has also cast a shadow over the rapid global recovery. Oil prices have also continued to trade in a tight range, with WTI trading below $60.
On Wednesday, the general focus shifted to the regular release of U.S. commercial crude oil inventory data, but the International Energy Agency went ahead and released its own monthly report, adding fuel to the oil market's fire, 14th, the IEA sharply raised its forecast for global oil demand in 2021, citing signs that the global economy is recovering faster than previously thought, particularly strong demand in the U.S. and China. In the latest monthly oil market report, IEA raised the growth forecast of oil demand in 2021 from 230000 B / D to 5.7 million B / D, and revised the forecast of global oil demand in 2021 from 96.5 million B / D to 96.7 million B / D. The market cheered the news and oil prices rose quickly.
The U.S. Energy Information Administration released data on U.S. commercial crude inventories later on Wednesday, which also gave the oil market a boost, U.S. crude oil inventories plunged 5.89 million barrels in the week to April 9, far exceeding expectations for a 2.7 million barrel decline and falling for a third straight week from a previous decline of 3.52 million barrels, data showed, while East Coast crude stocks hit their lowest level in more than 30 years. Gasoline inventory rose slightly by 309000 barrels, lower than the market expectation of 786000 barrels. In addition, U.S. fuel consumption rose to 8.9 million barrels a day, the highest level since last August. Oil prices rose further on the report.
Separately, on Tuesday, the Organization of Petroleum Exporting Countries (OPEC) also raised its forecast for global oil demand to 5.95 million b/d in 2021, an increase of 70,000 b/d from last month. The increase in demand has provided support for OPEC's increase in production. Even if OPEC + gradually increases production by more than 2 million B / D in the next three months, oil inventories are expected to decline.
Oil prices are finally breaking out in the midst of a downturn as the three major institutions support oil prices and look forward to economic recovery. But does this portend smooth sailing for the oil market for a long time to come? Well, not quite, According to the SunSirs, the good news on the demand side is indeed to be expected. At present, there are twists and turns in the progress of vaccine vaccination, which is only a problem in the early stage. The progress will be further accelerated when the problems are solved in the later stage. However, this does not mean that there will be no variables in the oil market in the future, and the risk of supply side still exists. At present, OPEC + is still controlling production, and the future policy will continue to expand production with the increase of market demand. OPEC + still has a lot of idle capacity. The IEA report also points out that OPEC + will still have nearly 6 million barrels of effective idle capacity per day by July. In addition, the biggest supply risk remains Iran, which is affected by U.S. sanctions with an estimated 1.5 million b/d of production capacity, which could also create a variable in the market if the U.S. and Iran return to the nuclear deal. In addition to the continuous growth of shale oil in the United States, the increase in supply will still greatly suppress the growth of demand. Generally speaking, oil prices are mainly volatile in the near future, and there are no conditions for a big rise in the long term.
