Investing.com -- Crude futures surged more than 3% on Thursday to reach fresh monthly highs, as energy traders continued to digest bullish comments from OPEC Secretary-General Abdalla Salem El-Badri on robust global demand growth over the next year.
On the New York Mercantile Exchange, WTI crude for November delivery traded in a broad range between $47.78 and $49.99 a barrel before settling at $49.47, up 1.64 or 3.47% on the day. The sharp gains on Thursday extend a surge from earlier this week when crude futures nearly jumped by 5% during Tuesday's session. Minutes before Thursday's close, Texas Long Sweet futures came a penny away from reaching the $50 level, a price not attained since late-July.
On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $51.30 and $53.51 a barrel before closing at $53.11, up 1.77 or 3.41% on the session. Brent futures exceeded $53 a barrel for only the second time since Sept. 1. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $3.64, just above Wednesday's level of $3.62 at the close of trading.
In prepared remarks for an address in front of the International Monetary Fund's International Monetary and Financial Committee, El-Badri predicted that global demand will increase this year at a level considerably higher than previously anticipated. Citing stronger than expected demand in the U.S. and Europe, as well as South Korea, El-Badri forecasted that global oil demand will spike by 1.5 million barrels per day for 2015.
"The US has shown bullish oil demand growth for the first eight months of this year, with gasoline and jet fuel leading gains. Gasoline consumption was encouraged by lower oil pump prices, in addition to improving car sales," El-Badri said in the remarks. "A similar trend was also observed in OECD Europe with diesel and LPG supporting growth. In Asia Pacific, oil demand in Japan remained sluggish, indicating a contraction compared with last year. Declines in direct crude burning and fuel oil consumption have contributed negatively to oil demand growth. In contrast, South Korea saw a very bullish first half of 2015, with naphtha consumption in the petrochemical industry lending support to growth."
El-Badri's remarks have fueled speculation that OPEC could institute measures to raise oil prices in the near-future. Crude prices are down by roughly 50% since OPEC rattled global energy markets with a strategic decision last November to leave its production ceiling unchanged above 30 million barrels per day.
The comments also came on the heels of bullish projections by the U.S. Energy Information Administration regarding a potential tightening of the global supply-demand imbalance. In its October Short-Term Energy Outlook, the EIA forecasted that global supply next year will rise to 95.98 million bpd, a level 0.1% lower than its estimates in September. In addition, the EIA also said that demand is expected to rise 270,000 bpd to 95.2 million bpd, amid stronger projections for Chinese demand growth. The forecasts represent a 0.3% increase from the EIA's projections in September.
On Wednesday, the EIA said that U.S. crude inventories for the week ending on Oct. 2 rose by 3.1 million barrels, slightly above expectations for a build of 2.2 million barrels. At 461.0 million barrels, U.S. crude oil stockpiles remain near levels not seen for this time of year in at least the last 80 year
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell to an intraday low of 95.06 on Thursday, its lowest level since Sept. 11. In U.S. afternoon trading, the index stood at 95.37, down 0.37% on the day.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.