Crude oil prices increased on Wednesday after an anticipated fall in US crude inventories, coupled with euphoria over rising oil demand and recovery signs of the world’s largest economies.
International benchmark Brent crude was trading at $74.55 per barrel at 06.57 GMT for a 0.75% increase after closing Tuesday at $73.99 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $72.59 a barrel at the same time for a 0.65% rise after ending the previous session at $72.12 per barrel.
The upward movement in prices was mainly driven by expectations of a hefty drop in US crude oil inventories.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 8.54 million barrels in US crude oil inventories relative to the market expectation of a draw of 3 million barrels.
A strong inventory decrease implies an uptick in crude demand in the US, assuaging market concerns over falling demand.
Positive forecasts on recovering demand also fueled market optimism.
Reiterating its previous forecast that Brent would hit $80 in the third quarter of 2021, Goldman Sachs predicted that Saudi Arabia’s oil production would reach 10 million barrels a day by the end of this year in line with rising demand.
The Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) had also projected a faster recovery in oil demand, particularly in the second half of the year.
Investors are now awaiting Federal Reserve projections.
The Fed’s two-day meeting that kicked off Tuesday will conclude Wednesday when it will release key macroeconomic projections for economic growth, inflation and employment.