U.S. crude oil futures soared past $81 a barrel on Thursday, marking their highest level since early November. The surge was fueled by the International Energy Agency's forecast of a supply deficit for 2024.
The West Texas Intermediate (WTI) contract for April climbed $1.54, or 1.93%, settling at $81.26 a barrel. Meanwhile, the Brent contract for May added $1.39, or 1.65%, reaching $85.42 a barrel.
The IEA's projection of a slight supply deficit, rather than a surplus, for the year was a significant factor behind the rally. This forecast assumes that OPEC+ will maintain its production cuts through 2024, with the cartel's reductions of 2.2 million barrels per day scheduled at least through the second quarter.
Global demand growth was also revised upward by 110,000 barrels per day to a total of 1.3 million barrels per day.
The bullish momentum follows a 2% surge in oil prices on Wednesday, triggered by Ukrainian drone attacks on Russian oil refineries earlier in the week. U.S. crude has seen a 13.4% increase in 2024, while the global benchmark has risen by 10.9%.
In related news, despite recent stability in oil prices, concerns loom over rising exports from Russia in the wake of Ukrainian attacks on refineries. The uncertainty surrounding U.S. interest rates ahead of this week's Federal Reserve policy meeting also adds to market sentiment.
Analysts predict that Brent crude will likely trade within a $80-90 per barrel range this year, with an anticipated end-June forecast of $86 per barrel.
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