Oil rose amid global economic recovery

On April 7, the global benchmark Brent crude increased on improving the global economic outlook. However, U.S. crude dipped on boosting gasoline inventories amid fears that new COVID-19 outbreaks will weaken a global rebound in fuel demand.

Brent crude futures surged 0.67% which equals 42 cents and settled at $63.16 a barrel. Meanwhile, U.S. West Texas Intermediate crude gained 44 cents, which equals 0.7%, and hit $59.77 per barrel.

According to the Energy Information Administration, U.S. crude stocks declined by 3.5 million barrels last week. However, gasoline inventories increased by 4 million barrels. Significantly, a 221,000-barrel gasoline dip was anticipated.

Additionally, oil prices found support from the U.S. Federal Reserve’s signs that policymakers were optimistic in their overall economic outlook.

On Tuesday, the International Monetary Fund announced unprecedented public spending to fight COVID-19 would push global growth to 6% this year, a rate unseen since the 1970s. Furthermore, it also helped the fuel demand outlook, which also supported prices.

Still, bosting coronavirus infections in the Americas, which accounted for more than half of all COVID-related deaths last week, kept rates from moving higher.

Oil prices fell earlier this week after the Organization of the Petroleum Exporting Countries (OPEC) and allies agreed to ease oil output cuts from May.

Global economic is expected to increase by 6.2% in 2021

Global economic growth is now anticipated at 6.2% in 2021, up by 0.4 percentage point from the March STEO, as per estimates from Oxford Economics which the EIA uses for prediction modeling.

In 2022, global oil demand is expected to grow by another 3.7 million BPD over 2021 and exceed the pre-pandemic levels from 2019. According to EIA’s latest estimates, the World’s petroleum consumption is likely to average 101.3 million BPD in 2022.

The 2021 global oil demand growth was boosted by 200,000 BPD, while the 2022 growth estimate was revised down by 100,000 BPD from the March forecasts. Remarkably, it had pegged demand growth at 5.3 million BPD this year and 3.8 million BPD in 2022.