Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Oil Up as Investors Bet on Fuel Demand Surpassing Supply

Commodities Jun 03, 2021 12:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
LCO
-0.77%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-0.93%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Gina Lee

Investing.com – Oil was up Thursday morning in Asia, in a third day of gains. Investor expectations that a surge in fuel demand in the U.S., China, and Europe, as well as major fuel producers, will exceed supply later in 2021 gave the black liquid a boost.

Brent oil futures rose 0.60% to $71.78 by 12:22 PM ET (4:22 AM GMT) and WTI futures gained 0.60% to $69.24.

U.S. crude oil supply data from the American Petroleum Institute showed a draw of 5.360 million barrels for the week ending May 28. Forecasts prepared by Investing.com predicted a 2.114-million-barrel draw and a 439,000-barrel draw was recorded during the previous week.

Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

Market forecasters, including the Organization of the Petroleum Exporting Countries and its allies (OPEC+), expect that fuel demand will surpass supply in the second half of 2021.

Fuel demand will be 99.8 million barrels per day (bpd) while supply of 97.5 million bpd by the end of 2021, according to OPEC+ data. This will mainly be driven by increased demand in the U.S. and China, the top two oil importers globally, as well as the U.K. which is lifting its COVID-19 lockdowns.

"The U.S. driving season is a period that sees higher‑than‑normal fuel consumption. UK traffic is now sitting above pre‑pandemic levels…we continue to see the oil demand recovery led by the U.S., Europe and China," CBA commodities analyst Vivek Dhar said in a note.

On the supply front, OPEC+ agreed at its 20-minute meeting on Tuesday to continue to gradually ease supply curbs through July. There were no clues on future supply policies as the cartel remains cautious about the second half of 2021.

A potential increase in Iranian supply has also been delayed as talks between the U.S. and Iran to revive a 2015 nuclear accord slowed down.

Although optimism remains that a deal could be struck when the talks resume in the following week, some investors remain skeptical.

"The current talks in Vienna to revive the 2015 nuclear accord, which would see U.S. sanctions on Iran lifted, now look unlikely to find a resolution," said CBA's Dhar.

Oil Up as Investors Bet on Fuel Demand Surpassing Supply
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email