(Bloomberg) – Oil reached its highest intraday level in more than a month, the combination of lower supply of petroleum products in the United States and signs of stronger demand raising expectations a recovery in global consumption.
Futures surged 2.2% in New York on Wednesday. A US government report showed total oil inventories fell last week, due to the largest weekly drop in distillate inventories since early March. A demand indicator for all petroleum products reached its highest level in more than two months. Meanwhile, Goldman Sachs Group Inc. predicts an unprecedented increase in global demand for oil with rising vaccination rates.
“Seasonally, this is when we should see big increases in crude inventories,” said Matt Sallee, portfolio manager at Tortoise, a company that manages approximately $ 8 billion in assets related to crude oil. energy. “There are a lot of green shoots in demand.”
The sharp drop in distillate supplies to the United States comes as strong freight demand drives a trucking boom, another sign of the recovery underway in the world’s largest oil-consuming country. However, a resurgence of the pandemic in countries like India and Brazil still raises concerns about a near-term recovery in full-blown global demand.
“The market expects a major revitalization of global oil demand from this summer,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. “As vaccination campaigns progress and lockdowns are about to be lifted soon in Europe and other recovering economies, the need for fuel for the road and the plane will increase. and the result will be felt.
The Energy Information Administration report also showed that national crude inventories rose 90,000 barrels last week, less than the 4.32 million barrels increase reported Tuesday by the funded American Petroleum Institute. by industry. Gasoline inventories rose for a fourth straight week, according to EIA data.
However, risks to the demand outlook are starting to show up in market health indicators. On Wednesday, the structure of the Middle East benchmark in Dubai collapsed to a slight downgrade – an indication that the crude supply crunch may ease.
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