A rise in oil price with a two-week high on Tuesday after the United States lifted travel restrictions and other signs of a global post-pandemic recovery boosted the demand outlook, while supply remained tight.
Prices rallied after the projection of U.S. Energy Information Administration (EIA) in its Short Term Energy Outlook (STEO) on Tuesday. They projected retail gasoline prices would decline over the next several months.
U.S. President Joe Biden’s administration said it would use price forecasts in the STEO report to determine whether to release oil from the nation’s Strategic Petroleum Reserve (SPR).
Analysts said if the STEO had shown a huge rise in projected gasoline prices, the Biden administration was likely to release lots of oil from the SPR quickly, which would have depressed prices.
Brent futures rose $1.35, or 1.6%, to settle at $84.78 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.22, or 2.7%, to settle at $84.15.
They were the highest closes for both benchmarks since Oct. 26. The rise in oil price is inevitable in the coming weeks and months.
The price of Brent has gained over 60% this year and hit a three-year high of $86.70 on Oct. 25, supported by recovering demand and supply restraint by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.
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