Oil prices rose higher on Wednesday on the prospect of stronger global economic growth amid rising COVID-19 vaccinations and a report that crude stocks in the United States, the world’s largest fuel consumer, fell.
But optimism over talks between the United States and Iran and an impending increase in supply from major oil producers limited gains.
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Brent crude futures in June rose 24 cents or 0.4% to $ 62.98 a barrel at 0403 GMT, while US West Texas Intermediate crude rose 20 cents or 0.3% to $ 59.53 in May.
“Optimism about the global economic outlook boosted sentiment in the crude oil market,”
Prices were split as data on Tuesday showed U.S. job openings rose to a two-year high in February, while employment rose. This followed previous data showing improvement in the service sectors in the US and China.
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The International Monetary Fund said Tuesday that unique government spending on COVID-19 would push global growth to 6% this year, an unprecedented rate since the 1970s.
Optimism with a broader rollout of vaccines also increased prices with U.S. President Joe Biden moving up to the COVID-19 vaccination eligibility target for all U.S. adults by April 19th.
U.S. crude oil inventories fell more than expected in the week ending April 2, while fuel inventories rose, according to three market sources, citing U.S. Petroleum Institute (API) figures ahead of government data on Wednesday.
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Oil production in the United States is expected to fall by 270,000 barrels per day. Day (bpd) in 2021 to 11.04 million bpd, the Energy Information Administration (EIA) said on Tuesday, a steeper decline than its previous monthly forecast for a decline of 160,000 bpd.
Iran and the world powers held what they described as “constructive” talks on Tuesday and agreed to form working groups to discuss the potential revival of the 2015 nuclear deal that could lead to Washington lifting sanctions on Iran’s energy sector and increasing oil supplies.
Oil prices fell earlier in the week after the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC +, agreed to gradually ease oil production cuts from May.
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“Raw prices appear to be consolidated as energy traders need to see how OPEC + exactly follows their plan to increase production and if the EU approaches virus immunity by the end of June,” said Edward Moya, senior market analyst at OANDA.
(Reporting by Jessica Jaganathan; Editing by Christian Schmollinger)