Oil prices rise to 8-week high on demand hopes; US export decline

 Oil prices rose to an eight-week high on Wednesday as U.S. crude exports plunged and on signs of a speedy economic recovery and upbeat forecasts for energy demand

By Scott DiSavino

NEW YORK (Reuters) - Oil prices rose to an eight-week high on Wednesday as U.S. crude exports plunged and on signs of a speedy economic recovery and upbeat forecasts for energy demand.

Brent futures rose 77 cents, or 1.1%, to settle at $69.32 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 80 cents, or 1.2%, to settle at $66.08.

That was the highest close for Brent since March 11 and for WTI since March 5.

U.S. crude exports fell last week to around 1.8 million barrels per day (BPD), their lowest since October 2018, while crude inventories declined 0.4 million barrels versus an expected 2.8 million-barrel draw, according to weekly government data. [EIA/S]

"The export (drop) is the bullish element keeping trade propped up," Tony Headrick, energy market analyst at CHS Hedging, said, noting the crude stock "drawdown combined with the lack of exports is a good sign."

Traders noted one factor in the U.S. inventory report that weighed on prices was a 2.2 million BPD drop in total oil products supplied to 17.5 million BPD last week. That was the biggest weekly decline and lowest weekly demand since January.

The International Energy Agency (IEA) said in its monthly report that oil demand is already outstripping supply and the shortfall is expected to widen even if Iran boosts exports.

Similarly, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday stuck to a forecast for a strong recovery in world oil demand in 2021, with growth in China and the United States outweigh the impact of the coronavirus crisis in India.