Oil prices surged gains on Thursday after gaining 1% in the previous session.
The prospect of increased demand for this summer outweighs concerns about the impact of increased COVID-19 cases in India, Japan and Brazil.
Brent crude for June rose 42 cents, or 0.6%, to $ 67.69 a barrel at 0622 GMT, while West Texas Intermediate (WTI) crude oil rose 36 cents, or 0.6%, to $ 64.22 for June.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, stuck to plans to gradually ease oil production restrictions from May to July after slightly increasing their 2021 demand growth forecast. The group also expects global stocks to reach 2.95 billion barrels in July, below the 2015-2019 average.
Looking at the state of global oil inventories, it appears that the market may be closer to the rebalancing point than OPEC + thought, and most of the crude inventory spike was refined and consumed by the market.
While oil demand is expected to rise to a record 101.5 million barrels this summer, according to some analysts, it should be borne in mind that if increasing COVID-19 cases in India and Brazil lead to deeper lockdowns, domestic demand will again be affected.
It is undeniable that a severe epidemic is preventing the rise of oil in a country with high oil consumption and population, such as India. But if India resolves this and the process does not lead to a complete deadlock, the market will likely continue its rally.
Investors are observing an increase in US refinery operating rates and a decrease in distillate stocks last week, data released by the Energy Information Administration on Wednesday.
U.S. crude inventories rose by 90,000 barrels last week, much lower than analysts’ forecast of 659,000 barrels.
