Oil Price Fundamental Daily Forecast – Today’s EIA Report Expected to Show Crude Oil, Gasoline Drawdowns

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Wednesday, boosted by the impressive pace of the U.S. economic recovery, and optimistic expectations for energy demand in light of progress with vaccinations against COVID-19.

Gains are being capped, however, by concerns over surging coronavirus infections in India and Brazil. Data from the American Petroleum Institute (API) also contributed to the firmer prices.

At 10:06 GMT, June WTI crude oil is trading $65.75, up $0.47 or +0.72% and July Brent crude oil is at $68.96, up $0.41 or +0.60%. Rollover to the July WTI crude oil contract on Thursday.

International Energy Agency Sees Higher Demand

The IEA said in its monthly report that demand for oil will exceed the output of the top producers.

“The anticipated supply growth through the rest of this year comes nowhere close to matching our forecast for significantly stronger demand beyond the second quarter,” the IEA said.

Organization of the Petroleum Exporting Countries Predicts Strong Recovery

Oil prices were also supported by the outlook from OPEC, which on Tuesday stuck to a forecast for a strong recovery in world oil demand in 2021, with growth in China and the United States outweighing the impact of the coronavirus crisis in India.

American Petroleum Institute Weekly Inventories Report

The API on Tuesday reported a draw in crude oil inventories of 2.533 million barrels for the week ending May 7. Analysts had predicted a draw of 2.817 million barrels for the week.

While crude oil inventories fell this week, U.S. oil production was unchanged at 10.9 million bpd on average for the week ending April 30, according to the latest data from the Energy Information Administration (EIA).

The API also reported a build in gasoline inventories of 5.640 million barrels for the week ending May 7 –more than offsetting the previous week’s 5.308 million barrel draw. Analysts had expected a 600,000 barrel draw for the week.

Distillate stocks saw a decrease in inventories this week of 872,000 barrels for the week, after last week’s 3.453-barrel decrease.

Cushing inventories fell this week by 1.209 barrels.

Daily Outlook

Analysts are expecting data to show U.S. crude inventories fell by about 2.3 million barrels in the week to May 7, following an 8 million-barrel drop the previous session, according to a Reuters poll.

Gasoline stocks are expected to have fallen by about 400,000 barrels, six analysts estimated on average ahead of reports from the EIA on Wednesday.