LONDON — Global oil prices hit a 14-month pinnacle on Wednesday, buoyed by strong energy demand in the United States, the world’s biggest crude consumer, ahead of US inventories data, analysts said.
In early deals, New York’s main contract, West Texas Intermediate for delivery in August, surged to $104.87 a barrel — a level last seen in May 2012. It later stood at $104.75, up $1.22 from Tuesday’s closing level.
Brent North Sea crude for August rallied to $108.47 a barrel — reaching a high last seen in April — before pulling back to $108.13, but still up 32 cents from Tuesday’s close.
New York’s light sweet crude had already scaled 14-month highs Tuesday on expectations of tighter US oil stocks and Egypt-linked supply fears.
Industry data from the American Petroleum Institute (API) released Tuesday showed that US oil inventories tumbled by nine million barrels last week.
Later on Wednesday, the US government’s Energy Information Administration will announce its report on American oil stockpiles for the week to July 5.
Expectations are for a 2.9-million-barrel slump in crude reserves, according to analysts polled by Dow Jones Newswires. That would indicate a pickup in energy demand.
Elsewhere, concerns over disruption in Middle East supply caused by Egyptian turmoil have eased after a timetable for fresh polls was announced Tuesday following last week’s military coup.
Separately on Wednesday, oil exporting cartel OPEC predicted that world crude demand will pick up at a faster rate in 2014, but also warned of the potential impact of economic troubles in Europe, the US and China.
In 2014, oil demand will average 90.68 million barrels per day (mbd), up from a revised 2013 estimate of 89.64 mbd “partially on the back of an improvement in global economic growth,” OPEC said in its monthly report.
This would represent the biggest increase in demand since 2010, the Vienna-based Organization of Petroleum Exporting Countries (OPEC) added.
Once again, developing countries — especially their transportation and industrial sectors — will lead the push while demand in the OECD club of advanced economies will contract, OPEC said.
A slower than expected recovery in the crisis-hit eurozone, the United States and China, could however dampen oil demand growth, it warned.
Other risks included the introduction of further energy-efficiency policies in some transportation sectors, oil subsidy cuts in Indonesia and the projected restart of Japan’s nuclear power plants.
For 2013, OPEC — which pumps about 35 percent of the world’s oil supply — barely revised its demand forecast from 89.65 mbd in June.
The 12-member cartel noted stronger-than-expected demand in North America in the first quarter as well as positive developments in Germany’s industrial sector, although growth forecasts for China and the Middle East were lowered.