Oil Prices Stable on Confidence in Demand Recovery

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Oil prices rose nearly 2 on Wednesday, after U.S. distillate inventories posted a large drawdown and refining activity picked up, boosting hopes for rising fuel demand.

The market remained concerned, however, about Indias surging coronavirus cases.

Brent crude futures rose 1.28, or 85 cents, to settle at 67.27 per barrel. U.S. West Texas Intermediate WTI crude futures settled 1.46, or 92 cents, higher at 63.86 per barrel.

U.S. crude inventories rose by 90,000 barrels last week to 493.1 million barrels, the Energy Information Administration said on Wednesday. Analysts had expected a 659,000barrel rise.

Distillate stockpiles fell by 3.3 million barrels in the week, and refining capacity use rose to 85.4 on the week.

The market is taking this as a positive, said Phil Flynn, senior analyst at Price Futures Group in Chicago. Gasoline demand weekoverweek was down a smidge, so that was a bit disappointing, but it was offset by the fact that we had a big leap in distillate demand.

U.S. bank Goldman Sachs said on Wednesday it expected the biggest jump in oil demand ever, at 5.2 million barrels per day bpd over the next six months, as vaccination campaigns accelerate in Europe and travel demand climbs.

Goldman said easing international travel restrictions in May would hike jet fuel demand by 1.5 million bpd.

OPEC this week decided to stick to plans for a phased easing of oil production restrictions from May to July, an indication that the group is confident that global…

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