Oil prices tumbled on Thursday after holding around one-month highs in the previous session, having surged at around 5% after the International Energy Agency (IEA) and OPEC raised forecasts for oil demand despite the prevailing coronavirus Pandemic.
Brent crude was down by 21 cents, or 0.3%, at $66.37 a barrel by 0129 GMT, after gaining 4.6% on Wednesday and closing at the highest since March 17.
U.S. West Texas Intermediate (WTI) futures dropped 25 cents, or 0.4%, to $62.9 a barrel, having risen 4.9% in the previous session.
The American Petroleum Institute reported crude inventories fell by 3.61 million barrels last week compared with estimates for a decline of about 2.9 million barrels from analysts, which is a third straight decline.
However, the U.S. investment bank brought forward its predicted peak for global oil transport demand by one year to 2026 due to the rising penetration of electric vehicles as economies push for decarbonization.
“We see robust stock draws even after factoring in bearish risks as refinery runs are set to rise sharply in the coming months,” Citi Research Analysts
Last week, gasoline supplied to the market, which is an indicator of U.S. consumption of the fuel, increased to 8.9 million barrels per day (BPD), the highest since August, the EIA said in their report.
According to the IEA’s monthly report, global oil demand and supply are set to be rebalanced in the second half of this year after the evaporation of demand in 2020 as the COVID-19 pandemic greatly affected demand.
OPEC Raises Oil Demand Forecast
The Organization of the Petroleum Exporting Countries (OPEC), which has been withholding supply together with other producers, including Russia, this week raised its forecast for global oil demand this year by 5.95 million barrels per day (BPD) 2021, up by 70,000 BPD from its forecast last month.