Oil surges on stronger growth outlook, vaccine rollout

Photo: AP

International crude priced rose as post-pandemic economic outlook improved on the back of fast vaccine rollout and stimulus packages in industrial countries, Reuters reported. The biggest oil consumer in the world also reported a drop of inventories which prompts a further price rise. Brent futures rose up to $63.08 a barrel while US West Texas Intermediate spiked to $59.65.

“Optimism on the global economic outlook boosted sentiment in the crude oil market,” analysts from ANZ bank wrote in a note quoted by Reuters.

Prices were buoyed as US job openings rose to a two-year high in February while hiring picked up. This followed earlier data showing US services activity touching a record high in March and China’s service sector showing the sharpest increase in sales in three months.

The International Monetary Fund also said unprecedented public spending to fight Covid-19, primarily by the United States, would push global growth to 6% this year, a rate unseen since the 1970s.

Optimism on a wider rollout of vaccines also boosted prices with US President Joe Biden moving up the Covid-19 vaccine eligibility target for all American adults to 19 April.

US crude oil stockpiles fell in the most recent week, while fuel inventories rose, according to three market sources, citing American Petroleum Institute (API) figures ahead of government data. Crude inventories fell by 2.6 million barrels in the week ended 2 April, the sources said, citing the API data. Forecasters had predicted a drop of just 1.4 million barrels.

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