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Brent crude futures for May rose 72 cents, or 0.86%, to $84.75 a
barrel by 1021 GMT. U.S. West Texas Intermediate (WTI) crude for
April was up 83 cents, or 1.04%, at $80.55.
The IEA forecast first-quarter global demand growth to rise a
higher than previously expected 1.7 million barrels per day
(bpd) because of an improved U.S. outlook and firmer bunkering
demand owing to longer voyages to avoid the Red Sea.
It also raised its 2024 demand growth forecast by 110,000 bpd
from its previous report but warned that "the global economic
slowdown acts as an additional headwind to oil use". The agency
expects overall demand growth to slow to 1.3 million bpd this
year after growth of 2.3 million bpd last year.
"Whilst the IEA’s view on global oil balance is still more than
a country mile away from OPEC’s prognosis, this report does
nothing to dent the developing upbeat mood," said PVM analyst
Tamas Varga.
The IEA also cut its 2024 supply forecast, factoring in the
latest cuts from the OPEC+ coalition as well as lower output
from non-OPEC nations. It expects oil supply to rise by 800,000
bpd to 102.9 million bpd this year.
"Quite a bullish report, with upward revisions on demand growth,
and lower supply growth estimates," said UBS analyst Giovanni
Staunovo.
Brent closed above $84 a barrel for the first time since
November on Wednesday after both contracts chalked up close to
3% daily gains on an elevated U.S. demand outlook and heightened
geopolitical risk.
U.S. gasoline inventories slid for a sixth straight week,
falling by 5.7 million barrels to 234.1 million barrels, the
Energy Information Administration (EIA) said on Wednesday,
triple the expectations for a draw of 1.9 million barrels.
U.S. crude oil stockpiles also fell unexpectedly as processing
increased.
Supportive on the demand front, the U.S. bought about 3.25
million barrels of oil for the country's Strategic Petroleum
Reserve for August delivery.
On the supply side, Ukrainian drone strikes on Russian refining
facilities continued for a second day on Wednesday.
(Reporting by Robert Harvey in London, Andrew Hayley in Beijing
and Trixie Yap in SingaporeEditing by David Goodman)
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