Oil Up Over Optimistic Outlook for Fuel Demand

© Reuters.

By Gina Lee

Investing.com – Oil was up Wednesday morning in Asia as investors grew confident about an optimistic outlook of fuel demand due to accelerating vaccinations and easing travel restrictions.

rose 0.26% to $72.41 by 10:17 PM ET (2:17 AM GMT) and jumped 0.33% to $70.28.

Tuesday’s U.S. crude oil supply data from the showed a draw of 2.108 million barrels for the week ending June 4. Forecasts prepared by Investing.com had predicted a 3.576-million-barrel build, while a 5.360-million-barrel build was recorded during the previous week.

Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

On the demand front, investors remain optimistic about the outlook for fuel demand as accelerating vaccinations allow people to travel more.

The U.S., the world’s largest oil consumer, lowered travel warnings for several countries, including France, Canada and Germany, making it possible to loosen airline restrictions for trips overseas.

“The fundamental outlook for crude is bullish right now… the easing of travel restrictions will be a game-changer for the international air travel outlook, which is the last part of the equation for a robust demand recovery,” Edward Moya, senior market analyst at Oanda Corp., told Bloomberg.

Meanwhile, U.S. shale oil output is reportedly set to rise only moderately through 2022, despite a pickup in drilling driven by gains in crude prices. It comes as the Energy Information Administration expected a decrease in its shale production for 2022, according to a monthly report.

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