Oil prices rose Thursday as markets braced for potentially hectic trading after an extremely bullish U.S. inventory forecast from industry body the American Petroleum Institute late Wednesday.
The November contract for the crude oil benchmark Brent was up 1.79% at $48.84 while its U.S. counterpart West Texas Intermediate was up 2% at $46.40 for October deliveries.
The API forecasts a hefty 12.1 million barrels decline in U.S. crude stocks for last week and if this figure is emulated in the official data, set to be released Thursday by the Energy Information Administration, market participants forecast prices will rise accordingly.
“This is a constructive number for oil and one if repeated by the EIA will be enough for another pop in oil prices,” said Dominick Chirichella from the New York-based Energy Management Institute in a note.
Paris-based Société Générale SCGLY 0.07 % said in a note that the long process of rebalancing means markets have now transitioned from the huge global oversupply of oil. The bank forecast supply and demand will be roughly balanced for the next four quarters before moving into a deficit in the third quarter of 2017.
Meanwhile, analysts from the Turin-based Intesa Sanpaolo ISNPY 0.48 % said in a note the dollar weakening now lessened the chance of an interest rate rise in the U.S. later this month. This would subsequently provide a tailwind for oil prices.
The EIA released its short-term energy outlook Wednesday and stated Brent will average $43 a barrel in 2016 before recovering to $52 a barrel in 2017. The EIA’s forecast for global demand growth is also more bullish than other watchdogs, stating 2016 consumption will rise by 1.5 million barrels a day. This compares favorably with the Paris-based International Energy Agency which has stated global demand growth will only rise by about 1.2 million barrels a day in 2017.
Nymex reformulated gasoline blendstock for October—the benchmark gasoline contract was up 1.63% at $1.45 a gallon, while October diesel traded at $1.38, 2.38% higher.
ICE gasoil for September changed hands at $421.25 a metric ton, up 2.56%.
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