On Wednesday, both UK and US WTI (West Texas Intermediate) crude oil futures’ prices had stretched their recent leg of blistering rally, climbing just a notch shy of 2 per cent after torrenting to a nearly one-year peak a day earlier as US stockpiles soured to their lowest levels since March 2020 despite a record surge in US drilling rig counts.
In point of fact, recent rallies in crude oil futures’ prices were almost entirely prompted by an unprecedented extent of demand-surge, while investors seemingly were eyeing a $1.9 trillion in fresh stimulus proposed by the US President Joe Biden earlier last month.
Apart from that, the crude oil-buying spree attained further steam later in the day after the US EIA (Energy Information Administration) had been quoted saying that the US crude stockpiles had declined to 475.7 million barrels last week, a level never seen since March 2020, while refinery utilization rate rose by 0.6 per cent.
Besides, analysts suggested the latest leg of blowout gains in US and UK crude futures’ prices led to a scenario where contracts for near-term deliveries became more expensive than the contracts scheduled for later dates, meaning a swathe of market participants were expecting that the global crude oil supplies might tighten up their belts further in a near-term outlook.
Oil extends gains as US stockpiles fall to lowest since March 2020
Citing statistics, in the day’s commodity market wind-down, US WTI crude futures’ prices climbed 1.7 per cent to settle down at $55.69 per barrel, the highest since January 22, 2020, while Brent crude futures’ prices gained 1.7 per cent to $58.46 per barrel, a level never witnessed since February 21, 2020.
Meanwhile, referring to a strong demand of oil alongside a steep rise in activities in the US refineries following a record rise in orders for US-borne core capital goods last month, a senior analyst at the Price Futures Group in Chicago, Phil Flynn said, “Refineries are back in business, which is supportive for crude”.