Oil futures rose by around 5% in European trading on Wednesday (April 14) on a brighter outlook for COVID vaccinations, better Chinese economic data and an assertion by the International Energy Agency (IEA) that crude market “fundamentals look decidedly stronger.”

At 12:33pm EST, the Brent Oil June contract was up 4.77% or $3.04 to $66.71 per barrel, while the West Texas Intermediate May contract traded at $63.24 per barrel, up 5.08% or $3.06. That’s after overnight data from China suggested crude oil imports jumped by 21% in March year-on-year, albeit from a low base recorded in the same month last year.

The data arrived in step with a rising rate of COVID-19 vaccinations in major economies including the United States and United Kingdom, despite fresh concerns over the rollout of Astrazeneca and Johnson & Johnson vaccines.

However, in its monthly report published on Wednesday, the IEA said market fundamentals were improving. While the Paris-based think-tank said caution was merited, the “massive overhang in global oil inventories that built up during last year’s COVID-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing.”

It opined that global crude oil demand and supply were likely to rebalance in the second half of the year, adding that producers may need to pump 2 million barrels per day (bpd) more to meet the expected demand at that point.

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It noted that a seventh consecutive monthly decline to February for commercial oil inventories in OECD countries signaled a rise in demand and increased imports in the near future. But the IEA added that the situation is also “currently deteriorating sharply in some large non-OECD oil consumers (e.g. Brazil, Iran and India).”

On balance, much of the commentary and data was enough to support bullish intraday sentiment in the market. The rally was lent further weight by data published later on in the session by the US Energy Information Administration. It noted that crude inventories fell by 5.9 million barrels stateside, well above a Reuters analysts’ panel prediction of a 2.9 million barrel decline.

Earlier in the week, the Organization of Petroleum Exporting Countries (OPEC) raised its demand forecast by 190,000 bpd from its previous month’s estimate, expecting global consumption to average 96.46 million bpd this year.

Citing economic stimulus programs and a further easing of COVID-19 lockdown measures, OPEC said global oil demand was projected to grow 5.95 million bpd in 2021, compared with its 5.89 million bpd forecast in March.

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