Oil prices have increased over hopes of fuel demand recovery despite the challenges posed by the Covid-19 pandemic.
Brent crude futures rose by $0.14 to reach $45.10 while the US West Texas Intermediate (WTI) increased by $0.12 to settle at $42.36 a barrel, Reuters reported.
Mizuho Securities energy futures director Robert Yawger was quoted by the news agency as stating: “The situation has improved some, but the market dynamics are still less than stellar,” adding ‘the market is oversupplied’.
Prices were supported by data released by industry group Energy Information Administration (EIA), which highlighted a drop in the US crude oil, gasoline and distillate inventories last week.
Paris-based energy watchdog International Energy Agency (IEA) has decreased its annual demand estimate by 8.1Mbpd due to air travel restrictions as a result of the pandemic.
The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that the world oil demand is expected to decrease by 9.06Mbpd this year. This estimate is more than the 8.95Mbpd decline forecast a month ago.
OPEC and its allies, known as OPEC+, made output cuts since May by 10% of global demand to handle the economic fallout as a result of the coronavirus outbreak.
On 13 August, Russian news agencies reported that the country’s energy minister Alexander Novak does not expect any hasty decisions on output cuts during the next OPEC+ group monitoring committee meeting next week.