Global benchmark Brent crude futures sat at $ 84.78 a barrel while US West Texas Intermediate sat at $ 84.15.
Oil prices rose to a two-week high on Tuesday after the United States lifted travel restrictions and other signs of a global post-pandemic recovery boosted demand, while supply remained tight.
Prices rose after the US Energy Information Administration (EIA) in its Short-Term Energy Outlook (STEO) on Tuesday predicted that retail petrol prices will fall over the next few months.
US President Joe Biden’s administration has said they will use price forecasts in the STEO report to determine whether oil should be released from the country’s Strategic Petroleum Reserve (SPR).
Analysts said if the STEO had shown a large increase in projected petrol prices, the Biden administration would probably release a lot of oil from the SPR, which would have lowered prices.
Global benchmark Brent crude futures rose $ 1.35, or 1.6 percent, to pay $ 84.78 a barrel, while U.S. West Texas Intermediate Crude rose $ 2.22, or 2.7 percent, to rise To establish $ 84.15.
They were the highest closings for both benchmarks since October 26th.
Brent’s price rose more than 60 percent this year, reaching a three-year high of $ 86.70 on October 25, supported by the restoration of supply and demand control by the Organization of Petroleum Exporting Countries and Allies, known as OPEC +.
“The EIA STEO gives President Biden a lot of cover for doing nothing, and claims he’s waiting for clumsy predictions to play out,” said Bob Yawger, director of energy futures at Mizuho in New York.
In the STEO, the EIA projected average prices for ordinary retail petrol will fall from $ 3.32 per liter in November to $ 3.16 in December and $ 3.00 in the first quarter of 2022.
OPEC + added 400,000 barrels per day (bpd) of crude oil to global supply at last week’s OPEC + meeting. President Biden wanted it to add more. OPEC + is scheduled to add 400,000 bpd per month by June 2022, Yawger said.
“Any release of the US SPR, while likely to have a temporary sluggish effect on fast prices, is not a lasting solution to an imbalance between supply and demand,” said Louise Dickson, senior oil markets analyst at Rystad Energy .
Global oil reserve production capacity could decline next year as air passengers return to the air, removing an important cushion that the market is currently enjoying, said Amin Nasser, CEO of Saudi Aramco.
Travelers left for the U.S. again, while the passage of Biden’s $ 1 trillion infrastructure bill and better-than-expected Chinese exports helped paint a picture of a recovering world economy.
JPMorgan Chase said world demand for oil in November had already returned to pre-pandemic levels of 100 million bpd, following last year’s collapse.
In India, fuel demand rose to a seven-month high in October, with petrol sales rising to an all-time high.
Despite a tight world market, analysts predict that U.S. crude oil stocks will rise for a third consecutive week, potentially helping to curb further price increases.
The first of this week’s two supply reports, from the industry group the American Petroleum Institute, will appear later Tuesday.