Oil prices rallied again yesterday as the Organisation of Petroleum Exporting Countries (Opec) monthly report revealed that world oil demand is slated to grow at a higher rate than previously expected.
Prices fell by over 50 per cent between July 2014 and the start of 2015 due to a combination of falling global demand, growing US supply and Opec’s refusal to cut production.
While the benchmark Brent crude oil price has been moving upwards since the end of February, the rally began to reverse last week, but the commodity climbed back above $67 a barrel at its peak yesterday.
Opec yesterday revised demand expectations for crude oil up to 29.3m barrels per day, a slight increase on last month and a gain of 0.3m barrels per day on 2014.
The organisation also noted that US oil rigs have been in decline since last October, and said that based on an indicated time lag of 23 weeks between a drop in rig activity and reduction in crude oil output, US oil supply is expected to decline in the third and fourth quarters of 2015.
Meanwhile, Opec strongly denied reports that it had ruled out a return to triple-digit oil prices in the next decade, and said there was “no basis whatsoever” to claims that crude oil would remain below $100 a barrel until 2025.