2021.05.1219:24:00UTC+00Oil Futures Settle Notably Higher On Inventory Data, Positive Demand Forecast

Crude oil prices moved higher on Wednesday, lifting the most active crude oil futures contracts to their highest settlement in about two months, after a positive report about outlook for energy demand.

Data showing a drop in crude stockpiles in the week ended May 7 contributed as well to oil's uptick.

West Texas Intermediate Crude oil futures for June ended down by $0.80 or about 1.2% at $66.08 a barrel.

Brent crude futures were up $0.50 or 0.73% at $69.05 a barrrel a little while ago.

Data released by Energy Information Administration (EIA) showed U.S. oil stockpiles dropped by less than expected last week. The data said crude oil inventories fell 427,000 barrels last week, as against expectations for a draw of about 2.82 million barrels.

Distillate stockpiles, which include diesel and heating oil, were down by 1.733 millions in the week, a larger drop than an expected draw of 1.080 million barrels, according to the data. Meanwhile, gasoline inventories increased by 378,000 barrels last week, while expectations were for a 600,000-barrel drop.

A report from the International Energy Agency (IEA) said demand for oil will exceed the output of the top producers. The IEA estimates that world oil demand would average 96.4m bbl/day this year, up from 91m bbl/day last year when consumption plunged by 8.7m bbl/day owing to the pandemic and related lockdown measures.

Oil prices were also supported by the outlook from the Organization of the Petroleum Exporting Countries (OPEC), which on Tuesday stuck to a forecast for a strong recovery in world oil demand in 2021.

The American Petroleum Institute reported late Tuesday that U.S. crude oil stocks fell by 2.5 million barrels in the week to May 7. Inventory data from the Energy Information Administration will be released later in the day.