Crude oil prices rose sharply on Thursday, extending gains from the previous session, amid rising hopes about energy demand after the International Energy Agency (IEA) lifted its demand outlook.
The dollar’s weakness following the soft inflation data contributed as well to the rise in oil prices.
West Texas Intermediate Crude futures ended higher by $2.41 or about 2.6% at $94.34 a barrel.
Brent crude futures settled at $99.60 a barrel, gaining $2.20 or about 2.3%.
The IEA said in its monthly report that soaring oil use for power generation in Europe and the Middle East will boost crude consumption for the rest of the year.
“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the IEA said, raising its outlook for 2022 demand by 380,000 barrels per day (bpd).
The IEA also said that Russia’s oil output will likely fall roughly 20 percent by the start of next year as a European Union import ban comes into force.
Data from the Energy Information Administration (EIA) on Wednesday showed crude oil inventories jumped by 5.458 million barrels last week, as against expectations for a rise of 73,000 barrels.
However, gasoline stockpiles dropped by 4.978 million barrels, substantially larger than the expected drop of 633,000 barrels.
The EIA data also showed an outflow of 5.3 million barrels from the U. S. emergency oil reserve last week, resulting in the balance in the Strategic Petroleum Reserve dropping to 464.6 million barrels, the lowest level since April 1985.
Source: Read Full Article