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Oil prices climb on signs of strong fuel demand recovery

A 3D printed oil pump jack is placed on dollar banknotes in this illustration picture. — Reuters
A 3D printed oil pump jack is placed on dollar banknotes in this illustration picture. — Reuters

SINGAPORE: Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies.


Brent crude futures were up 32 cents, or 0.4%, at $72.54 a barrel at 0640 GMT, having earlier touched $72.83, the highest since May 20, 2019. Brent rose 1% on Tuesday.


US West Texas Intermediate (WTI) crude futures climbed 31 cents, or 0.4%, to $70.36 a barrel, after rising to as high as $70.62, highest since Oct. 17, 2018. WTI prices climbed 1.2% on Tuesday.


"Improved demand outlook appears to be bolstering crude oil prices, as the successful vaccine rollouts and summer driving season in the United States and Europe continues to support fuel demand," said Margaret Yang, a strategist at Singapore-based DailyFX.


Recent traffic data suggests travellers are hitting the roads as restrictions ease, ANZ Research analysts said in a note, pointing to TomTom data which showed traffic congestion in 15 European cities had hit its highest since the coronavirus pandemic began.


On Tuesday, the US Energy Information Administration forecast fuel consumption growth this year in the United States, the world's biggest oil user, would be 1.49 million barrels per day (bpd), up from a previous forecast of 1.39 million bpd.


In another positive sign, industry data showed US crude oil inventories fell last week, in line with analysts' expectations, according to a Reuters poll.


The American Petroleum Institute reported crude stocks fell by 2.1 million barrels in the week ended June 4, two market sources said, citing the data.


Stockpile data from the US Energy Information Administration is due on Wednesday at 1430 GMT. — Reuters


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