Mar 10, 2021
Crude is still up more than 30% this year, hitting a multiyear high on Monday as the market tightens. Output cuts from Saudi Arabia and OPEC+, and an improving demand outlook with the rollout of Covid-19 vaccines have both aided the rally. Tensions have also escalated in the Middle East after a key crude export terminal in the kingdom was attacked on Sunday, adding to a recent series of assaults on the major producer.
“Global oil inventories could be back to normal already in May this year,” said Bjarne Schieldrop, chief commodities analyst SEB AB. “OPEC+ is keeping the market much tighter this year than we had expected.”
There are already signs that oil demand is recovering. An Idled plant in the Philippines will restart in the second half as fuel sales rebound in the Asian nation. Congestion in New York is also clawing back, with this month set to mark the fastest increase in toll route traffic since November 2019.
See also: Tanker Rates to Ship U.S. Oil to Europe Rise 80% After Cold
U.S. gasoline inventories dropped by 8.5 million barrels last week, while distillates — a category that includes diesel — fell by 4.8 million barrels, the API said. Crude stockpiles rose by almost 13 million barrels, which would be a third weekly gain if confirmed by government figures on Wednesday.
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