Oil futures rally to 8-week high following IEA report

London (Quantum Commodity Intelligence) – Oil futures Wednesday were trading a 5-week highs as sentiment remaided broadly positive on the speed of the demand recovery, particularly from the US.

Brent futures for front-month July were trading at $69.24/barrel (1040 GMT), compared to Tuesday's settle of $68.55/b, an increase of 1.01% on the day.

At the same time June WTI was trading $65.77/b, up 0.77% from Tuesday's settle of $65.28/b.

The latest report from the International Energy Agency (IEA) said that deamnd was already outstipping supply, and the market could accomodate additional Irania barrels. 

However, the IEA report cautioned that the resurgence of Covid-19 has delayed the recovery in worldwide oil demand, but a second half-year surge will leave supplies tight unless OPEC increases production. 

Global oil demand is now forecast to rise 5.4 million b/d this year, down 270,000 b/d from the IEA's forecast in April.

India's Covid-19 crisis will wipe 630,000 b/d of oil demand in the country in the second quarter.

Europe and OECD counties in North and South America have seen their first-quarter demand downgraded by 320,000 and 515,000 b/d respectively in the first quarter.