U.S. crude oil futures jumped above $81 a barrel Thursday, the highest since early November, after the International Energy Agency forecast a supply deficit for 2024.
The WTI April contract rose $1.54, or 1.93%, to settle at $81.26 a barrel, while the Brent May contract was up $1.39, or 1.65%, at $85.42 a barrel.
The other big driver for the rally is a revised forecast from IEA for a slight supply deficit, not a surplus, for the year. Supply forecasts are based on supplies from OPEC+, which assumes that the producer group maintains cuts through 2024-the cartel's cuts of 2.2 million b/d are slated for at least the second quarter.
Meanwhile, global demand growth was revised up 110,000 bpd to 1.3 mb/d.
The bullish momentum comes after a 2% gain in the price of oil on Wednesday, following Ukrainian drone attacks on Russian oil refineries earlier in the week. U.S. crude is up 13.4% so far in 2024, while the global benchmark is up 10.9% percent.
Against the background of news like the following-to the extent that oil prices are mostly stabilized, the specter of increased Russian exports after Ukrainian attacks on refineries remains. Adding further to this uncertainty, U.S. interest rates with the Federal Reserve policy meeting this week feed into sentiment.
Some analysts are still expecting Brent crude to trade in their forecast range of $80-$90 a barrel this year; putting their end-June estimate at $86 a barrel.
Comments