Miles Johnson writes:
Crude continued to rebound on Thursday, rising above $72 a barrel for the first time in seven months as the International Energy Agency said oil’s recent rally was in part justified by market fundamentals.
The report from the Paris-based IEA, which advises 28 nations on energy policy, raised its global consumption outlook for the first time since August, arguing that demand had risen after refiners had restarted operations after completing spring maintenance repairs.
Before the report the IEA had warned that the recent oil price rally – which has seen crude jump from $32 a barrel in February to $72 per barrel – was fuelled by investors speculating on a global economic recovery rather being justified by supply-side factors.
However, the agency did reiterate that speculative positions taken by investors looking to hedge themselves against currency debasement and inflation had played a role in crude factors.
Nymex July West Texas Intermediate, the US crude benchmark, rose 57 cents to $71.89 per barrel – meaning the contract has gained 5.5 per cent this week. It earlier hit a high of $72.30 per barrel.
ICE July Brent, the European benchmark, gained 25 cents to $71.05.
Bulls also pointed towards data from China showing net crude oil imports rose to a 14-month high in May, and yesterday’s weekly inventories data from the US Energy Information Administration, the statistical arm of the US Energy Information Administration.
Weekly crude inventories data showed crude imports fell by 676,000 barrels per day – significantly more than analyst forecasts averaging around the 400,000 barrel mark.