Despite data showing a jump in crude inventories, oil futures settled higher on Thursday as the International Energy Agency (IEA) lifted its global oil demand forecast.
The IEA said in its latest Oil Market Report that it expects oil demand to rise by 5.5 million barrels per day to 96.3 million barrels per day in 2021, and and by 3.3 million b/d to 99.6 million b/d in 2022, slightly above pre-Covid levels. Last month, the agency had forecast demand will rise 96.1 million b/d in 2021 and 99.4 million barrels per day next year.
Oil also found support after Saudi Arabia dismissed calls for additional OPEC+ production increases, saying the group’s unwinding of production cuts was protecting the oil market from wild price swings seen in natural gas and coal markets.
West Texas Intermediate Crude oil futures for November ended higher byt $0.87 or about 1.1% at $81.31 a barrel, the highest level since late October 2014.
Brent crude futures were up $0.99 or 1.19% at $84.17 a barrel a little while ago.
Data released by the Energy Information Administration (EIA) this morning showed crude inventories in the U.S. rose by 6.1 million barrels last week, rising for a third straight week.
The EIA data said gasoline inventories dropped by 1.96 million barrels last week against expectations for a build of 3.26 million barrels, while distillate stockpiles dropped by 24,000 barrels in the week as against expectations for a 396,000-barrel decline.
The American Petroleum Institute on Wednesday reported a crude oil inventory build of 5.2 million barrels for the week ended Oct. 8, while analysts expected a build of 140,000 barrels.
In its monthly report released on Wednesday, the EIA said U.S. crude oil output will drop 260,000 barrels per day to 11.02 million bpd this year, and then bounce back to 11.73 million bpd in 2022.
OPEC has trimmed its world oil demand growth forecast for 2021 but said surging natural gas prices could boost demand for oil products as end users switch.