Oil prices continue to soar
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Gulf Today Report
Oil soared on Wednesday following data indicating a drop in US inventories and OPEC raising its outlook for oil demand.
Brent crude futures rose 85 cents, or 1.3%, to $64.52 a barrel by 06:19 GMT while US West Texas Intermediate (WTI) crude futures added 82 cents, or 1.4%, to $61 a barrel.
China and United States have shown signs of recovery recently supporting recent price gains but fear of slow vaccination rollout and soaring COVID-19 cases in India and Brazil as capped gains.
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"Continuing setbacks on vaccine rollouts and global cases nearing January's peak is likely to hold a firm cap on crude's ascent in the short term. At the same time, persistent optimism over a US recovery and the world being on the cusp of emerging out of the COVID crisis is holding a floor," said Vandana Hari, energy analyst at Vanda Insights.
The dollar declined, recording a three-week low on Wednesday, making crude cheaper for other currency holders.
In addition to the weaker dollar, Iran's increased enrichment activity was "also somewhat supportive, with it suggesting that a return of the US to the Iranian nuclear deal is likely to be some way off, and therefore the lifting of sanctions," said ING Bank in a note on Wednesday.
Meanwhile, OPEC has adjusted its forecast for world oil demand growth this year. It is expecting demand to rise by 5.95 million barrels per day in 2021, up by 70,000 bpd from its forecast last month.
