If you think you’ve heard this before, you’re absolutely right. Nonetheless, oil rallied today on a forecast from the International Energy Agency that oil stockpiles in developed countries could hit or fall below their five-year average “very soon.” West Texas Intermediate, the U.S. crude benchmark, closed up 2.2% to $49.30 a barrel. That brings us back near to the $50 level that has defined the top of the range in oil prices for much of 2017. (The high for West Texas Intermediate in 2017 is $54.45 a barrel back on February 23.)
The IEA report also forecast the fastest growth in demand for crude oil in two years. Consumption will grow by 1.6 million barrels a day in 2017. That’s up from growth of 1.5 million barrels a day in the group’s last forecast. (Not much of an increase and certainly within the margin of error on this forecast.) The difference, according to the forecast, is stronger than expected demand in the United States and Europe. This follows on a forecast by OPEC yesterday that called for higher demand for OPEC oil in 2018 as the global market tightens.
Meanwhile, back on the U.S. oil shale front, the U.S. Energy Information Administration reported that U.S. crude oil inventories rose by 5.9 million barrels las week. Analysts were looking for a gain of 3.2 million barrels.
This is the second report on U.S. inventories since Hurricane Harvey shut down most of the oil refineries along the Gulf Coast of Texas
Which means that I’d take any figures on U.S. crude with a grain of salt or three.