Oil prices moved higher on Wednesday as a trend of stronger global economic growth amid rising COVID-19 vaccination and reported declines in crude stocks in the United States, the world’s largest oil consumer.
But optimism about the talks between the United States and Iran and the impending supply increase from the big oil producers has raised profits.
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June Brent crude futures were up 24 cents, or 0.4 percent, to $ 62.98 a barrel by 0403 GMT, while U.S. mid-West Texas crude for May rose 20 cents, or 0.3 percent, to $ 62.98. $ 59.53
“Optimism of the global economic outlook boosts confidence in the crude oil market,”; ANZ bank analysts wrote in a note on Wednesday.
Prices were floating as data on Tuesday showed US job openings rose to a two-year high in February, while hiring rose. This is based on previous data showing improvements in the US and Chinese service sectors.
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The International Monetary Fund said on Tuesday that public spending to combat COVID-19 would drive global growth to 6 percent this year, a rate not seen since 1970.
Optimism about the broader vaccine launch has also raised prices.US President Joe Biden has moved COVID-19 eligibility targets for all American adults through April 19.
U.S. crude stocks fell more than expected in the week ended April 2, while fuel inventories rose by three market sources, citing figures from the American Petroleum Institute (API) ahead of government data on Wednesday.
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U.S. oil production is expected to decline 270,000 barrels per day (bpd) in 2021 to 11.04 million bpd, the Energy Information Administration (EIA) said Tuesday, a sharp drop from previous monthly forecasts. That is down by 160,000 barrels per day.
Iran and the world powers organize what they describe as talks. It said it was “constructive” on Tuesday and agreed to set up a working group to discuss the renewal of the 2015 nuclear deal, which could lead to the lifting of sanctions on Iran’s energy sector and an increase in Iran’s oil supply.
Oil prices fell earlier this week after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, agreed to gradually ease cuts in oil production since May.
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“The price of crude oil appears ready to consolidate as energy traders need to see how OPEC + follows their plans to increase output and if the EU is close to immunity to the virus by the end of June,” said Edward. Moya, senior market analyst at OANDA.
(Reporting by Jessica Jaganathan; (Compiled by Christian Schmollinger)