Oil rises a second day with focus on returning fuel consumption

By By Andres Guerra Luz on 4/28/2021

(Bloomberg) — Oil rose to the highest intraday in a week as expectations strengthened for a revival in global consumption despite the resurgent pandemic in India and Brazil.

Futures in New York climbed as much as 1.5%, heading toward $64 a barrel. Goldman Sachs Group Inc. is forecasting an unprecedented jump in demand over the next six months as vaccination rates rise, with benchmark Brent crude seen reaching $80 in the third quarter. At the same time, California gasoline prices rose to $4 a gallon for the first time in a year and a half as virus restrictions ease in the most-populous U.S. state.

“The market expects a major revitalization for global oil demand from this summer onwards,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. “As vaccination campaigns progress and as lockdowns are set to soon be lifted in Europe and other recovering economies, the need for road and jet fuels will increase and the result will be felt.”

An OPEC+ committee agreed the group should stick to its roadmap for boosting supply in the coming months, reflecting confidence in the prospects for global consumption. But a surge of coronavirus cases in India and Brazil shows the recovery remains uneven. The market will look for further guidance later on Wednesday from weekly U.S. inventory figures as well as a Federal Reserve interest rate decision.

“Powerful reflation signals, a weaker dollar and a powerful recovery in US energy demand are all painting a brighter picture for demand down the road,” TD Securities commodity strategists led by Bart Melek said in a note. “OPEC’s cautious approach could offer a window for higher prices should energy demand continue to rise at a fast clip amid spreading vaccinations and travel.”


  •        West Texas Intermediate for June delivery added 85 cents to $63.79 a barrel on the as of 10:14 a.m. in New York
  •        Brent for June settlement gained 73 cents to $67.15 on the ICE Futures Europe exchange

The American Petroleum Institute reported a 4.32 million-barrel increase in U.S. crude stockpiles last week, according to people familiar with the data. If confirmed by government figures later on Wednesday, that would be a second weekly gain. The API posted a drop in gasoline inventories.

The risks to the demand outlook are starting to show up in gauges of market health, however. The structure of the Middle Eastern Dubai benchmark slumped on Wednesday to only a shallow backwardation -- an indication that tightness in crude supplies may be easing.

Other oil-market news:

  •        The Middle East’s petrostates have all accelerated multi-billion-dollar plans to sell energy assets or issue bonds off the back of them, including talks with Saudi Arabia to sell a stake worth about $20 billion in state oil firm Aramco.
  •        In the oil sands of western Canada, thousands of roughnecks have descended upon barracks in work camps and have turned the area, which accounts for more than half of America’s oil imports, into a hot spot for a resurgence of the pandemic.

Related News ///


Comments ///


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}