(New throughout, updates prices, market activity and comments)
By Scott DiSavino
NEW YORK, May 12 (Reuters) - Oil prices rose to an
eight-week high on Wednesday as U.S. crude exports plunged and
on signs of a speedy economic recovery and upbeat forecasts for
energy demand.
Brent LCOc1 futures rose 77 cents, or 1.1%, to settle at
$69.32 a barrel, while U.S. West Texas Intermediate (WTI) crude
CLc1 rose 80 cents, or 1.2%, to settle at $66.08.
That was the highest close for Brent since March 11 and for
WTI since March 5.
U.S. crude exports fell last week to around 1.8 million
barrels per day (bpd), their lowest since October 2018, while
crude inventories declined 0.4 million barrels versus an
expected 2.8 million-barrel draw, according to weekly government
data. EIA/S ENERGYUSA "The export (drop) is the bullish element keeping trade
propped up," Tony Headrick, energy market analyst at CHS
Hedging, said, noting the crude stock "drawdown combined with
the lack of exports is good sign."
Traders noted one factor in the U.S. inventory report that
weighed on prices was a 2.2 million bpd drop in total oil
products supplied to 17.5 million bpd last week. That was the
biggest weekly decline and lowest weekly demand since January.
The International Energy Agency (IEA) said in its monthly
report that oil demand is already outstripping supply and the
shortfall is expected to widen even if Iran boosts exports.
Similarly, the Organization of the Petroleum Exporting
Countries (OPEC) on Tuesday stuck to a forecast for a strong
recovery in world oil demand in 2021, with growth in China and
the United States outweighing the impact of the coronavirus
crisis in India. "Oil prices today are experiencing a lift on positive demand
outlooks released by OPEC and IEA, which both came out with a
similar consensus that oil demand will average 96.4 million bpd
in 2021," said Louise Dickson, oil markets analyst at Rystad
Energy.
Positive economic data also supported oil. Britain's
pandemic-battered economy grew more strongly than expected in
March, while U.S. consumer prices increased in April by the most
in nearly 12 years, as booming demand in a reopening economy
strained supply. India's coronavirus death toll crossed 250,000 in the
deadliest 24 hours since the pandemic began. Fuel shortages worsened in the southeastern United States as
the shutdown of the Colonial Pipeline, the nation's largest fuel
pipeline network, entered its sixth day. Colonial, which transports more than 2.5 million bpd, said
it hopes to restart a large portion of the network by the end of
the week.
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Call on OPEC+ crude vs. production https://tmsnrt.rs/3hgBzxD
Global oil supply https://tmsnrt.rs/33DVYEF
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