Oil prices rose on Wednesday, with Brent gaining for a fifth consecutive session, as falling stockpiles and a recovery in demand encouraged investors.
Brent crude was up 69 cents, or 0.9%, at $74.68 a barrel by 0200 GMT, having risen 1.6% on Tuesday while U.S. crude [WTI] gained 66 cents, or 0.9%, to $72.78 a barrel, after rising 1.7% in the previous session.
API Oil Metrics Data
Brent advanced 0.9%, while West Texas Intermediate climbed to the highest level since October 2018. The industry-funded American Petroleum Institute reported U.S. crude inventories fell 8.54 million barrels last week. That would be the largest drop since January if the figures are confirmed by government data later Wednesday. Still, inventories of gasoline and distillates expanded.
“Even non-energy traders are placing bets that oil prices will continue to rise,” said Edward Moya, senior market analyst at OANDA.
“Everyone is turning overly bullish with crude prices. The crude demand outlook is very robust as recoveries across the US, Europe and Asia, will have demand return to pre-COVID levels in the second half of next year,” Moya said.
Crude stocks were expected to have fallen for a fourth week in a row, dropping by about 3.3 million barrels last week, according to analysts polled by Reuters. Official government data is due out Wednesday.
Executives from major oil traders said on Tuesday they expected prices to remain above $70 a barrel and demand to return to pre-pandemic levels in the second half of 2022.
Vitol Chief Executive Russell Hardy said oil is likely to trade in a range between $70 and $80 a barrel for the rest of this year on the expectation that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will retain output restraints.
Even the return of Iranian exports if the United States rejoins a nuclear agreement and lifts sanctions on Tehran is unlikely to change the bullish picture, he said.
