The price of Brent Crude and West Texas Intermediate have rallied almost 20 per cent since late June, buoyed by global oil demand hitting an all-time high of 103mn barrels per day.
According to International Energy Agency (IEA), the main demand drivers include better-than-anticipated economic growth in OECD countries, the ongoing recovery in global air travel, and oil consumption gushing higher in China. The Asian powerhouse accounts for 70 per cent of IEA’s forecast 2.2mn barrels per day increase in annual global consumption this year.
At the same time, the organisation highlights tighter supply as both Russia and Saudi Arabia have cut output to support prices, the latter being the de facto leader of the Organization of the Petroleum Exporting Countries (Opec). Production from Opec+ countries has fallen to the lowest level since October 2021 and is forecast by the IEA to hit a two-year low in the current quarter.