Oil prices increased on Wednesday based on strong economic data from the US and China that is fueling quicker economic recovery projections, and with the more-than-expected crude oil inventory drawdown forecasts in the US.
International benchmark Brent crude was trading at $62.83 per barrel at 0626 GMT for a 0.14% increase after closing Tuesday at $62.74 a barrel.
American benchmark West Texas Intermediate (WTI) was at $59.41 per barrel at the same time for a 0.13% rise after it ended the previous session at $59.33 a barrel.
Positive economic outlook projections from the US and China last week are raising hopes of a quicker economic recovery and driving the upward price trend.
The growth in the economic activity in the US services sector in March, coupled with positive employment data, and with China's service-sector activity also hitting a three-month high in March supported prices.
The International Monetary Fund (IMF) has revised up its global gross domestic product (GDP) growth forecast on Tuesday in the April version of its World Economic Outlook report. The world GDP growth expectation for 2021 jumped 6%, up from 5.5% in the fund's January report.
US President Joe Biden's announcement on Tuesday to speed up by two weeks the deadline by which all states must institute universal adult eligibility for COVID-19 inoculations also boosted prices.
States must now allow everyone who wants a vaccine to get in line for an appointment by April 19, Biden announced at the White House, revising a previous May 1 deadline.
Another supporting element for prices is the more-than-expected drawdown projection in US crude oil inventories by the American Petroleum Institute. The institute estimates a draw of 2.618 million barrels for the week ending Apr. 2 while the market expectation was a 1.325-million-barrel draw.
Meanwhile, negotiations in Vienna between representatives from Iran, France, the UK, Germany, Russia, China, and the EU, notably with the US missing, are expected to pave the way for the de-escalation of tensions between the US and Iran. This has raised the possibility of the US lifting Iran's oil sales restrictions, which in turn would limit price gains, fueling fears that markets will be flooded with Iranian oil.
Iran’s chief nuclear negotiator on Tuesday urged the US to lift the sanctions from his country in a bid to restore the 2015 nuclear accord after the meeting ended on Tuesday.
“The lifting of the US sanctions is the first and most important aspect in reviving the JCPOA” or Joint Comprehensive Plan of Action – the formal name for the nuclear deal,” said Abbas Araghchi in the Austrian capital following the talks.
By Ebru Sengul Cevrioglu