Oil soars with solid demand outlook
Oil prices soared on Wednesday after the decline in US crude inventories reinforced OPEC's strong demand outlook, and the market focused on new updates regarding the Colonial Pipeline cut.
West Texas Intermediate (WTI) crude futures increased 11 cents, or 0.17% at 0534 GMT, to $ 65.39 a barrel, on top of Tuesday's 36 cents gain.
Brent crude oil futures rose 5 cents, or 0.07%, to $ 68.60 a barrel after a 23 cents increase on Tuesday.
American Petroleum Institute industry group data showed that US crude oil stocks fell 2.5 million barrels in the week of May 7.
The decline was less than the estimated 2.8 million barrels of crude oil stocks on average.
The decline came before the Colonial Pipeline was hit by a cyberattack last Friday. The operator said he hoped to restart a large part of the network by the end of the week.
Meanwhile, the market is tense as gas stations from Florida to Virginia begin to run out on Tuesday as drivers rush to fill their tanks and pump prices skyrocketed.
US unleaded gasoline prices reached an average of $ 2.99, the highest since November 2014.
While a prolonged downtime is supportive of refined product prices, it may begin to put pressure on crude oil prices if refineries on the US Gulf Coast are forced to lower operating rates due to increased refined stocks.
Despite the disease crisis in India, there is a strong recovery expected in world oil demand in 2021 as growth in China and the United States outweighs the impact of the coronavirus. Organization of Petroleum Exporting Countries (OPEC) data support this view.
OPEC said it expects demand to increase by 5.95 million barrels this year, and last month's forecast remained unchanged.
India is currently facing serious challenges related to COVID-19, and therefore OPEC expects the recovery to face a negative impact in the second quarter. But he expects it to continue to improve its momentum again in the second half of 2021.
However, OPEC reduced the demand outlook for the second quarter by 300,000 barrels a day due to the increase in COVID-19 infections in India.
