0338 GMT: Crude oil futures were higher during mid-morning trade in Asia April 27, as the market grew optimistic of a US-led global economic recovery, and rallied behind the OPEC+ Joint Technical Committee's upward revision of its demand forecast.
At 11:38 am Singapore time (0338 GMT), the ICE Brent June contract was up 38 cents/b (0.58%) from the April 26 settle at $66.03/b, while the June NYMEX light sweet crude contract was up 38 cents/b (0.6%) at $62.29/b.
Market analysts said that bullishness over the US economic recovery has trickled down to the crude oil market, as an increase in the country's economic activity is expected to shore up energy demand.
"The economic recovery is accelerating due to tremendous success with vaccine rollouts and on optimism that the economy will be fully reopened in June," Edward Moya, senior market analyst at OANDA, said in an April 27 note.
"The world's largest economy is expected to have grown by 6.5% in the first quarter, but traders should not be surprised if it is a lot closer to 7%," he added ahead of the April 29 release of the US' Q1 GDP figures.
Meanwhile, analysts said that an improved demand outlook for Europe has also lifted sentiment in the market. COVID-19 infection numbers have been dropping in major European economies and countries such as France, Italy and Greece have moved to ease their mobility restrictions, according to media reports.
The prospect of demand recovery in the west has given the market some respite from the deterioration of the pandemic in parts of Asia, especially in India and Japan. A debilitating wave of the coronavirus in India and Japan has limited the upside in the market, with Moya saying "concerns [over] crude demand [in] India and Japan have kept oil prices from participating with the broader rally in commodities."
The OPEC+ Joint Technical Committee also expressed concern over the rise in COVID-19 infection numbers in countries such as India and Japan, but nevertheless gave more weight to the improving economic prospects in the west and raised its 2021 crude demand growth forecast from 5.6 million b/d to 6 million b/d, in line with 5.95 million b/d forecasted in the April 13 OPEC oil market report.
"A bullish factor for crude was Monday's action from OPEC+ Joint Technical Committee to raise its global 2021 crude demand forecast to 6 million b/d from last month's estimate of 5.6 million b/d," said Avtar Sandu, senior commodities manager at Phillips Futures, in an April 27 note.
The market has its eyes set on the April 28 OPEC+ ministerial meeting, even though market analysts expect the meeting to conclude without any changes to the coalition's April 1 decision to increase production quotas from May.
