By Adedapo Adesanya
Oil stayed in the positive region on Tuesday as the International Energy Agency (IEA) said it expects a strong rebound in global demand from October.
Also, the prospect of another storm threatening to cause disruptions to the oil industry in the US Gulf area lifted the price of the Brent crude yesterday by 35 cents or 0.48 per cent to $73.86 per barrel and raised the West Texas Intermediate (WTI) crude by 29 cents or 0.4 per cent to $70.71 per barrel.
The IEA’s Oil Market Report showed earlier in the day that the global crude demand is expected to rebound with a 1.6 million barrels per day jump next month and continue rising through the end of the year, after three consecutive months of declines due to the Delta variant.
“Strong pent-up demand and continued progress in vaccination programmes should underpin a robust rebound from 4Q21,” said the IEA, which raised by 85,000 barrels per day its estimates for next year’s demand growth.
Overall, the agency lowered its 2021 global oil demand growth forecast by 105,000 barrels per day to 5.2 million barrels per day but raised its 2022 figure to 3.2 million barrels per day.
Along with an improved demand outlook from the IEA – and a massive 900,000 barrels per day bump in OPEC’s 2022 demand forecast a day before, the market was sated.
Also, tropical storm Nicholas brought heavy rain and power outages in Texas, US but caused less damage to energy infrastructure than Hurricane Ida caused earlier this month.
It is the second major storm to threaten the Gulf region in recent weeks but most Texas refineries were operating normally and utilities were restoring power to customers who suffered outages.
Still, more than 39 per cent of the US Gulf of Mexico’s production of crude and natural gas remained shut on Tuesday, the regulator Bureau of Safety and Environmental Enforcement (BSEE) said.
The market’s bullish performance was capped by data from the US Labour Department showed inflation cooling and as worries receded about the storm’s impact on the energy sector.
The consumer price index excluding the volatile food and energy components edged up 0.1 per cent last month. That was the smallest gain since February and followed a 0.3 per cent rise in July.