- POSTED: 23 Jan 2014 05:47
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Global oil prices struck their highest level so far this year on Wednesday, with the market buoyed by forecasts of stronger crude demand, analysts said.
NEW YORK: Global oil prices struck their highest level so far this year on Wednesday, with the market buoyed by forecasts of stronger crude demand, analysts said.
New York's main contract, West Texas Intermediate (WTI) for delivery in March, rallied to $96.73 a barrel, up $1.76 from Tuesday.
Brent North Sea crude for March gained $1.54 to $108.27 a barrel.
"The lack of fresh economic data means sentiment is still driven by events from yesterday when crude oil rallied after the International Energy Agency (IEA) sharply increased its forecast for global oil demand," said Forex.com analyst Fawad Razaqzada.
"On top of this, the International Monetary Fund (IMF) raised its global growth forecast for the first time in almost two years."
The IMF lifted its prediction for global economic growth on Tuesday by 0.1 percentage point to 3.7 percent for 2014.
The optimistic outlook is fuelled by solid growth in the United States as other countries also move away from austerity budgets.
The IEA also hiked its prediction of global oil demand, which is dependent on the strength of the world economy.
Stronger economic growth "denotes greater demand for crude oil because of expected higher economic activity," added Tan Chee Tat, investment analyst at Philips Futures in Singapore.
Tan also said that the opening on Wednesday of the southern leg of the Keystone XL pipeline in the United States helped bolster WTI prices.
"The pipeline is expected to be able to transport 700,000 barrels of crude oil per day," Tan told AFP.
He said the pipeline would help further alleviate the supply glut at the Cushing port in Oklahoma as it eases the transport of crude oil to refineries in the US Gulf Coast to meet demand.
The weekly report on US energy inventories, which is usually given on Wednesday, will meanwhile be published on Thursday owing to a public holiday on Monday.