OIL PRICES JUMP MORE THAN 4 PERCENT

OIL PRICES surged more than 4 percent yesterday, after a report from the International Energy Agency (EIA), followed by US inventory data boosted optimism about returning demand for crude.

Brent crude futures rose $2.70 (about R39.30), or 4.2 percent, to $66.37 a barrel by 5.05pm. US West Texas Intermediate (WTI) crude futures were up $2.78, or 4.6 percent, to $62.96 a barrel.

US crude inventories retreated by some 5.9 million barrels last week, the EIA said, exceeding analysts’ forecasts for a 2.9 million-barrel drop.

East Coast crude stocks hit a record low.

Petrol supplied in latest week, indicating the US consumption of the fuel, rose to 8.9 million barrels a day, the highest since August, the EIA report showed.

Petrol stocks rose by 309 000 barrels, less than expectations for a rise of some 786 000 barrels.

Distillate stockpiles fell by 2.1 million barrels in the week, versus expectations for a 971 000-barrel rise.

“All in all, it was a very supportive report,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “It really looks like we’re getting a return to some more solid demand numbers and that should keep us going.”

Earlier in the session, oil prices rose on a report from the International Energy Agency that predicted global oil demand and supply were set to rebalance in the second half of the year. It added that producers may then need to pump an additional 2 million bpd to meet the expected demand.

“That IEA report is one of the best ones we’ve seen them publish in awhile in terms of being optimistic about the continued rebound in demand,” said John Kilduff, partner at Again Capital in New York.

Similarly, the Organisation of the Petroleum Exporting Countries on Tuesday raised its global demand forecast by 70,000 bpd from last month’s forecast and now expects global demand to rise by 5.95 million bpd in 2021.

Signs of a strong economic recovery in China and the US have underpinned recent price gains, but stalled vaccine rollouts worldwide and soaring Covid19 cases in India and Brazil have slowed the market’s advance.