Oil prices closed bullish on Thursday, pushing the Brent crude futures towards $70 a barrel as strong U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter ease investors fears.
Brent crude futures are currently trading $69.21 a barrel, up 0.1% while U.S. West Texas Intermediate is trading $66.95 a barrel, gaining 0.15% at the time of writing this article.
OANDA analyst, Edward Moya gave a remark on oil after U.S. economic data was released stating, “Oil headed higher on robust U.S. economic data and growing sentiment that if the Iran nuclear deal is revived, it will not include an immediate removal of sanctions and that the oil market will not get quickly flooded with excess supplies.”
Brent and WTI are both on track to post weekly gains as analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter on summer travel in Europe and the United States following widespread COVID-19 vaccination programmes.
“Gasoline demand has now exceeded 2019 levels in many areas,” ANZ analysts said in a note, though the demand is being constrained in some places in Asia, particularly India, a country suffering from the third wave of COVID-19 outbreak.
Robust economic data from the United States, the world’s largest economy and oil consumer, also improved investors’ confidence as the number of Americans filing new claims for unemployment benefits fell to the lowest since March 2020, beating estimates.
The Organization of the Petroleum Exporting Countries and Allies (OPEC+) including Russia, is likely to stick to the existing pace of gradually easing of oil supply curbs. “Another 1 million BPD of oil would certainly slow the current drain on inventories,” ANZ said, adding that this will ultimately limit the price rise since there may be more oil supply in the mix due to the possibility of Iranian oil coming back to the market.