Crude pushes to 13-month highs amid tighter supply outlooks

New York — Crude oil futures settled at fresh 13-month highs Feb. 9 amid tightened supply outlooks.

NYMEX March WTI settled 39 cents higher at $58.36/b, and ICE April Brent climbed 53 cents to $61.09/b.

The US Energy Information Administration revised its crude price forecast higher in its in its monthly Short-Term Energy Outlook, released Feb. 9, amid tighter first-quarter supply outlooks.

The EIA now expects Brent crude prices to average at around $53.20/b in 2021, up 45 cents from its January forecast, and at $55.19/b in 2022; and the WTI spot price to average at around $50.21/b in 2021, up 46 cents from its most recent report, and at $51.56/b in 2022.

The upward revision is because of higher prices in January, EIA said which, in turn, are the result of Saudi Arabia announcing Jan. 5 it would unilaterally cut production by 1 million b/d in February and March.

"If global crude stockpiles continue to come down, that should keep oil prices elevated," OANDA senior market analyst Edward Moya said in a note. "Both WTI crude and Brent appear to be riding this reflation wave high, but it seems a new catalyst will be needed to take oil prices much higher from here."

NYMEX March ULSD settled up 89 points at $1.7567/gal, while March RBOB was down 12 points at $1.6736/gal.

There is increased risk appetite based on the vaccination program and OPEC+ cuts," Sucden UK's head of research, Geordie Wilkes, told S&P Global Platts Feb. 9. "The demand picture today is still weak, but there is a stronger demand outlook, investors are looking at Q2 ... vaccination rates across the world have started to increase, that is not having an impact right now, but there are clear signs that demand will come back online in a few months, helped also by stimulus in the US," he said, adding that in Europe there was hope for easing of some coronavirus-related restrictions in March.

Global liquid fuels consumption is now slated to average at 97.7 million b/d in 2021, EIA said, a downward revision of 200,000 b/d from last month's forecast and fully 3.5 million b/d below 2019 levels. But 2022 demand is now expected to climb 3.5 million b/d to 101.2 million b/d, an increase from the January forecast calling for a 3.3 million b/d increase next year.

EIA said US crude production will average 11 million b/d in 2021, a downward revision of 100,000 b/d from the previous forecast, but 2022 output was unchanged at 11.5 million b/d.

Midwest ULSD prices have moved sharply higher in recent days as the region faces an arctic blast bringing well below-normal temperatures.

S&P Global Platts assessed Chicago pipeline ULSD at the NYMEX March ULSD futures contract minus 25 points/gal Feb. 8, up 2.50 cents/gal on the day. This marks the strongest Chicago pipeline diesel has been since Dec. 28, when it was assessed at prompt-month futures plus 75 points/gal.