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Brent gains for fifth day as demand outlook improves, stocks fall

Brent crude was up 66 cents, or 0.9%, at $74.65 a barrel by 0445 GMT, the highest since April 2019

Topics
Brent crude | Oil Prices | Crude Oil

Reuters  |  TOKYO 

Photo: Reuters
Photo: Reuters

By Aaron Sheldrick

TOKYO (Reuters) - rose nearly 1% on Wednesday, with Brent gaining for a fifth consecutive session, as falling stockpiles and a recovery in demand kept the main benchmarks at multi-year highs.

was up 66 cents, or 0.9%, at $74.65 a barrel by 0445 GMT, the highest since April 2019.

U.S. crude gained 58 cents, or 0.8%, to $72.70 a barrel, the highest since October 2018.

"Even non-energy traders are placing bets that 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.

U.S. oil inventories dropped by 8.5 million barrels in the week ended June 11, according to two market sources, citing American Petroleum Institute figures on Tuesday.

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.

"Iranian floating storage has been rising since the start of the year and the timing and the scale of the return will likely impact the OPEC+ tapering process," RBC Capital said, referring to the gradual removal of productions constraints by the producer group.

 

(Reporting by Aaron Sheldrick. Editing by Gerry Doyle)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, June 16 2021. 12:37 IST
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