By Peter Nurse
Investing.com -- Crude oil prices edged higher Thursday, boosted by continued confidence by a group of top producers in surging oil demand in the second half of the year.
By 9:35 AM ET (1335 GMT), U.S. crude was up 0.8% at $70.53 a barrel, continuing to firm after closing above $70 earlier this week for the first time since October 2018. Brent was up 0.9% at $72.84, near a two-year high.
U.S. Gasoline RBOB Futures were up 1% at $2.2238 a gallon.
The Organization of the Petroleum Exporting Countries stuck to its forecast of a strong recovery in global oil demand in the second half of 2021, led by the United States and China.
In its monthly report, released earlier Thursday, the group said demand would rise by 6.6% or 5.95 million barrels per day this year, unchanged for a second consecutive month, despite a slower-than-expected recovery in the first half of this year.
"Global economic recovery has been delayed due to the resurgence of COVID-19 infections and renewed lockdowns in key economies, including the Eurozone, Japan and India," OPEC said in its monthly report.
"Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half," it said.
The overall market had shown weakness earlier Thursday, before the release of the OPEC report, following the release of disappointing U.S. gasoline inventory numbers Wednesday.
Crude oil supply data from the U.S. Energy Information Administration showed a draw, for the third straight week, of just over 5 million barrels, but gasoline inventories increased the most since April 2020, rising by more than 7 million barrels for a second weekly gain.
This points to a weaker-than-expected fuel demand at the start of the U.S. summer, the country's peak season for motoring.
“As we move deeper into the summer driving season, we would expect to see demand trending higher,” said analysts at ING, in a research note.
Also weighing was the news that fuel demand in India, the world's third-largest oil consumer, slumped in May to its lowest since August last year, as a second Covid-19 wave muted economic activity.
“However, with Covid-19 cases having peaked and some regions easing restrictions, fuel demand should already be in recovery mode,” ING added.