Oil prices surged on Thursday, driven by a positive demand outlook in the United States and a weaker U.S. dollar. Brent crude futures increased by 43 cents, or 0.6%, to $71.21 per barrel, marking their highest level since March 3. U.S. West Texas Intermediate (WTI) crude followed suit, rising by 38 cents, or 0.6%, to $67.54 per barrel.
The rise in oil prices came after U.S. government data showed a higher-than-expected drawdown in distillate inventories, which include diesel and heating oil. Distillate stocks fell by 2.8 million barrels last week, significantly outpacing a Reuters poll expectation of a 300,000-barrel drop.
JP Morgan analysts noted that the U.S. oil demand outlook remains strong, despite lower air travel volumes, emphasizing that reduced travel activity does not signal broader weakness in the demand outlook. Global oil demand averaged 101.8 million barrels per day (bpd), marking an annual increase of 1.5 million bpd, the analysts added.
As oil prices continue to climb, the outlook for future demand remains bullish, further supported by a weaker U.S. dollar, which makes oil more affordable for holders of other currencies.
