- Brent, WTI rise on Wednesday as global demand outlook improves.
- US crude stockpiles rose by 1.3 million barrels last week vs. estimate of more than 4 million barrels, according to EIA.
- US crude oil output expected to remain high until 2020, according to EIA.
The price of crude oil continued to rise on Wednesday, as US inventories rose much less than forecast last week, while the International Energy Agency raised its 2015 demand outlook.
Brent crude for May delivery climbed 2 percent to $59.52 a barrel.
US benchmark West Texas Intermediate (WTI) advanced more than 3.5 percent to $55.10 a barrel, narrowing its discount to Brent to only a few dollars.
Crude prices remained supported after the US Energy Information Administration (EIA) said US crude stockpiles rose at less than half the rate of forecast last week. Stockpiles increased by 1.3 million barrels in the week ended April 10, the EIA reported on Wednesday. Economists forecast a surge of more than 4 million barrels.
The slower-than-expected increase did very little to alleviate concerns about a growing supply-glut. The EIA reported last week that oil inventories increased by nearly 11 million barrels in the week ended April 3, the biggest build since 2001.
Crude oil received a boost on Tuesday after the International Energy Agency (IEA) increased its demand outlook for 2015. The agency said global demand for oil will continue to rise, despite slower economic growth from China. The IEA increased its 2015 demand estimate by 90,000 barrels per day to 93.6 million barrels per day. That helped push the price of Brent to $60 a barrel on Tuesday.
Despite the stronger demand outlook, the price of crude is unlikely to increase in a linear fashion. On Tuesday the US EIA said domestic crude production will continue to rise and peak at 10.6 million barrels per day in 2020. Crude production is expected to moderate to 9.4 million barrels per day in 2040. Shale formations will keep the market well supplied for years to come, despite falling prices.