On Wednesday, both US and UK crude oil futures feathered up more than 1 per cent after US EIA (Energy Information Administration) had reported a havoc-scale decline in US distillate stockpiles last week, while a raft of refiners stepping up activities to their highest level in more than a year had led to analysts’ belief that a rapid rise in fuel demand in the world’s largest oil consumer might be lurking over the horizon.
In point of fact, in the day’s rise in crude oil futures’ prices were handily catapulted by a cascade of key fundamentals including an OPEC+ decision to stick on to their bullish demand outlook, while a decline in US distillate stockpiles by 3.3 million barrels last week alongside a step up in refiners’ activities in the United States to their highest level in more than a year, added to further bullish pennant.
OPEC+ had been expecting an increase in demand above 6 million barrels per day (bpd) over second half of the year following a plunge of nearly 9.6 million bpd during the peak of pandemic outbreak last year. On top of that, leading US lender Goldman Sachs had said earlier last week that it was anticipating the biggest leapfrog in oil demands on record over next six months, as inoculation campaigns against the pandemic pathogen had been witnessing a stronger push in EU over recent weeks.
Crude oil soars as US distillate stockpiles decline
Citing statistics, in the day’s commodity market wind-down, UK crude futures added 1.3 per cent to $67.27 per barrel, while US WTI (West Texas Intermediate) crude futures climbed 1.5 per cent to settle down at $63.86 a barrel.
Meanwhile, addressing to investors’ optimism over a plausible end of the pandemic in a near term across the globe, which is highly unlikely according to a number of public health experts including US CDC (Centre for Disease Control and Prevention), an analyst at PVM Oil associates, Tamas Varga said, “The market is supported by the general belief that the COVID endgame is in sight. ”