© Reuters. FILE PHOTO: A crude oil tanker is seen in the port of Qingdao, Shandong province, China, April 21, 2019. REUTERS / Jason Lee / File Photo
By Aaron Sheldrick
TOKYO (Reuters) – Oil prices rose on Wednesday, with Brent rising for the fifth straight year as sentiment rose on falling inventory levels and a rebound in demand after the pandemic.
rose 47 cents, or 0.6%, to $ 74.46 a barrel by 0700 GMT, its highest level since April 2019.
rose 42 cents, or 0.6%, to $ 72.54 a barrel, its highest level since October 2018.
“Even non-energy traders are betting that oil prices will continue to rise,” said Edward Moya, senior market analyst at OANDA.
“Everyone is overly optimistic about crude oil prices. The outlook for crude oil demand is very robust as the recovery in the US, Europe and Asia will bring demand back to pre-COVID levels in the second half of next year,” Moya said.
US oil inventories fell 8.5 million barrels for the week ending June 11, according to two market sources, citing Tuesday’s figures from the American Petroleum Institute. [API/S]
According to analysts polled by Reuters, crude oil stocks are likely to have fallen for the fourth straight week, falling by around 3.3 million barrels last week. Official government data will be released on Wednesday. [EIA/S]
Executives of major oil traders said Tuesday they expect prices to stay above $ 70 a barrel and demand will return to pre-pandemic levels in the second half of 2022.
Russell Hardy, Vitol’s chief executive, said oil is likely to trade between $ 70 and $ 80 a barrel for the remainder of 2021 in anticipation of the organization of petroleum exporting countries and its allies known as the OPEC +, which would maintain production restrictions.
Even the return of Iranian exports when the US rejoins a nuclear deal and lifts sanctions against Tehran will not change the optimistic picture, he said.
“Iranian floating storage has increased since the beginning of the year and the timing and magnitude of the rate of return will likely affect the OPEC + tapering process,” said RBC Capital Markets, referring to the producer group’s gradual removal of production restrictions.
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