Oil prices jumped on Wednesday (June 23), with major benchmarks gaining nearly 1% after US Energy Information Administration data showed that crude stockpiles in the country decreased by 7.6 million to 459.1 million barrels in the week ending June 18, exceeding analyst expectations.
Brent for August settlements moved up 0.98% to $75.51 per barrel at 11:35 am ET, while West Texas Intermediate futures for delivery in the same month rose 0.92% to $73.52 per barrel.
Brent has gained more than 45% this year, supported by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and as easing or end of COVID-related restrictions, including for travel, boost demand.
Some oil industry experts are even talking of crude reaching $100 per barrel, a level last seen in 2014.
“We believe that the robust global oil demand recovery will outpace supply growth over the next 18 months, further draining inventories and setting the stage for higher oil prices,” Bank of America analysts wrote in a note earlier this week.
Worldwide consumption of the commodity is expected to nearly reach pre-Covid19 levels in the fourth quarter this year and to exceed 2019 demand in 2022, setting a new record for annual global oil demand.
Meanwhile, crude oil imports averaged 6.9 million barrels per day last week, up by 197,000 barrels compared to the previous week, according to the EIA report. Gasoline production averaged 10.3 million barrels per day.
The EIA also said that crude oil refinery inputs averaged 16.1 million barrels per day during the same week, 224,000 barrels per day less than the previous week’s average. Refineries operated at 92.2% of their operable capacity in the same period.
A retreat in the U.S. dollar has also boosted oil prices, making crude less expensive for buyers holding other currencies.
Meanwhile, OPEC and allies, collectively known as OPEC+ stands ready to act, with some 5.8 million bpd in idled production capacity. OPEC+ meet on July 1.
