By Gina Lee
Investing.com – Oil was up Wednesday morning in Asia, continuing a rally after data showed . Travel demand is also picking up as COVID-19 curbs ease, giving fuel demand an additional boost.
jumped 0.39% to $85.11 by 12:18 AM ET (5:18 AM GMT) and inched up 0.06% to $84.20.
Tuesday’s showed a draw of 2.5 million barrels for the week to Nov. 5. Forecasts prepared by Investing.com had predicted a 1.9-million-barrel build, while a 3.594-million-barrel build was reported during the previous week.
Investors now await , due later in the day.
“Supplies are tight with the Organization of the Petroleum Exporting Countries sticking to its guns,” Phillip Futures in Singapore senior commodities manager Avtar Sandu told Reuters, in reference to the recent agreement between OPEC and allies (OPEC+) to maintain an output growth of 400,000 barrels per day in December.
The growth of air travel also increases oil demand, and “I still see a bull charging on; it might be taking a break now, but (if there’s) any small spark, it might just continue its march,” said Sandu.
Vitol Group CEO Russel Hardy confirmed the tight market, saying on Tuesday that oil demand had returned to pre-COVID-19 levels and there will be a demand exceeding in the first quarter of 2022.
“The possibility of a spike to $100 per barrel is clearly there,” Hardy told the Reuters Commodities Summit.
Meanwhile, a short-term outlook from the EIA said gasoline prices would fall over the next few months. This will play a key factor on whether U.S. President Joe Biden decides to release oil from the Strategic Petroleum Reserve (SPR) as prices have risen recently.
“The EIA report… does curb concerns that the U.S. will release oil from its SPR,” Commonwealth Bank analyst Vivek Dhar said in a note.
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