Oil prices rose on Thursday after a hefty drop in US crude inventories and over successive positive forecasts on oil demand recovery in 2021.

International benchmark Brent crude was trading at $66.63 per barrel at 0706 GMT for a 0.07% increase after closing Wednesday at $66.58 a barrel.

American benchmark West Texas Intermediate (WTI) was at $63.16 per barrel at the same time for a 0.01% increase after it ended the previous session at $63.15 a barrel.

Recording an over 4% increase in Brent at $66.90 and WTI at $63.44 before closing on Wednesday, both benchmarks started the day on a bullish sentiment after a more-than-expected drop in US crude oil stocks.

US commercial crude oil inventories fell by 5.9 million barrels, or 1.2%, to 492.4 million barrels, relative to the market expectation of a fall of 2.1 million barrels, according to data released by the country’s Energy Information Administration (EIA) on Wednesday.

Such a hefty drop in inventories exerted upward oil price pressure, signaling a crude demand rebound in the US, the world’s largest oil consumer.

Positive forecasts raise hopes of demand recovery

One day after the Organization of Petroleum Exporting Countries (OPEC) revised up its global oil demand forecast, the International Energy Agency (IEA) also made upward revisions to its oil demand forecasts for 2021 in its monthly oil report on Wednesday.

The agency forecast that global oil demand will increase by 5.7 million bpd, or 6.3%, to an average of 96.7 million bpd this year on the back of better economic forecasts and robust, prompt fiscal indicators.

Pointing to the latest revision of the International Money Fund (IMF), which raised its forecast for 2021 GDP growth by 6%, the agency said this improved IMF outlook, along with swift vaccine rollouts in the US, upcoming hefty stimulus packages in the country, and improving economic data from China, led to a better global oil demand forecast.

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