Crude oil prices traded higher Thursday, climbing to their highest levels in seven weeks, boosted by further signs of a global economic recovery, particularly in the U.S., the world's largest consumer of oil.
By 9:45 AM ET (1445 GMT),U.S. crudefutures traded 2% higher at $65.14 a barrel, while the international benchmarkBrentcontract rose 2% to $68.12.
U.S. Gasoline RBOB Futures were up 1.5% at $2.1069 a gallon.
The U.S. economy strengthened in the first quarter of 2021 at a faster rate than expected, as Covid-19-related lockdowns started to ease.Gross domestic productgrew at an annualized rate of 6.4% in the first quarter, up from 4.3% in the fourth quarter of 2020 and faster than consensus forecasts of 6.1%.
This report detailed the strongest first quarter growth since 1984, with total economic output now less than 1% below the pre-pandemic GDP peak.
A separate report from the Labor Department showed that another 553,000 Americans filed first-timejobless claimslast week, a pandemic-era low.
With China's economy growing at a record 18.3% in the first quarter compared with last year and Germany’s government recently raising its growth forecast for Europe's largest economy to 3.5% from 3%, optimism is steadily growing that global oil demand can climb back to pre-pandemic levels in a short time.
Earlier this week technical experts from the Organization of Petroleum Exporting Countries saw demand climbing by 6 million barrels a day this year, while influential investment bank Goldman Sachs (NYSE:GS) expects global oil demand to realize the biggest jump ever over the next six months, as prices climb to around $80 a barrel.
Sentiment in the sector has also been helped by Europe's major energy companies reporting big increases in first-quarter earnings, putting the worst of the pandemic-driven slump in fuel demand behind them.
With benchmark oil prices recovering from an April 2020 low of $16 a barrel, most of the companies managed to drive profits back above levels seen before the coronavirus pandemic first struck.
Adding to the good news, the weekly EIA report showed some continued positive signals when it comes to U.S. demand, with refinery utilization at the highest level since March of last year.
“Refined products consumption also improved, with implied demand for total products increasing by 1.63MMbbls/d, leaving demand at the highest level since mid-February,” ING analysts said, in a note.
The one fly in the ointment is the increase in Covid cases in parts of the world that haven’t instituted successful vaccination programs, particularly in India.
“While demand appears to be trending in the right direction in the US, there are still clear concerns over the impact that the surge in Covid-19 cases in India is having on fuel demand,” ING added.