US West Texas Intermediate (WTI) crude oil hit its highest price in three months. It hit a new high of $81.05 on Thursday as investors eyed the price outlook after US crude oil stocks fell more than expected this week.
The International Energy Agency (IEA) raised their demand growth outlook.
The IEA now forecasts global crude oil demand to rise through 2024 by 1.3 million barrels per day, upping their earlier forecast by 110,000 barrels per day for the addition.
According to the IEA, stronger demand growth in the United States as well as continued uncertainty in the Red Sea due to Houthi attacks have increased shipping costs as cargo ships have had to change routes around the African continent to connect Asian and European markets.
They also expect global crude oil demand to average 103.2 million barrels per day in 2024 and forecast 2025 demand growth up about 50% since they first introduced their outlook last summer.
Despite the significant increase in demand expectations, the IEA is still well below forecasts from the Organization of the Petroleum Exporting Countries (OPEC) which expects crude oil demand growth to add at least 2.2 million barrels per day to current demand by 2024.
U.S. crude oil supplies fell more than expected this week as refiners started extra production.
The American Petroleum Institute (API) saw production of 5.5 million barrels for the week ending March 8 compared to an expected increase of 400,ooo barrels while EIA crude oil stocks fell 1.5 million in the same period, well below the forecast level of an increase of 1.338 million barrels.
