Oil futures: Prices ease back from peaks, Brent above $72.50/b
Quantum Commodity Intelligence – Crude prices rowed back from session highs in late London afternoon trading hours Thursday, having earlier rallied after the European Central Bank left interest rates unchanged.
Front-month September Brent was trading at $72.81/barrel (1540 GMT), compared to Wednesday's settle of $72.23/b, but off the earlier high of $73.09/b.
At the same time, September WTI was trading at $70.87/b, up from Wednesday's settle of $70.30/b, also off from the day's high of $71.16/b.
The ECB said it would continue quantitative easing, with net purchases under the asset purchase programme at a monthly pace of €20 billion, but cautioned over further inflationary pressures
Oil markets on Thursday were shrugging off Covid concerns and the rise in US crude oil stocks.
On Wednesday the US Energy Information Administration reported a 2.1 million-barrel build in crude stocks, but the market took its cue from a big draw in road transport fuels that consisted of 2.1 million barrels for diesel and 100,000 barrels for gasoline.
"Concerns of weaker economic growth saw Brent crude under pressure early in the session (Wednesday). But the release of inventory data in the US showed these concerns are unfounded," said Daniel Hynes, senior commodity strategist at ANZ.
Analysts also noted that most of the crude build occurred on the West Coast, which is isolated from the rest of the US system, while inventories at the Cushing hub fell to their lowest level since January 2020.
Meanwhile, JP Morgan said oil is likely to jump to $80/b this year amid expanding demand and a lack of supply.
Morgan Stanley also remains broadly upbeat on oil prices for the remainder of the year, amid a firm global economic recovery and cohesion among the OPEC+ producer group members.
The bank said it expects Brent prices in the mid-to-high $70s per barrel as the most likely scenario for the remainder of the year, although sees potential demand erosion in the $75-80/b range.
