Oil jumped the most since early June as shrinking crude stockpiles and dovish signals from the Federal Reserve buttressed hopes for an economic recovery.
Signs from the United Arab Emirates that it will make up for pumping too much oil in the past two months also boosted optimism over tightening supplies.
All indications are that the Fed is going to keep rates low for some time, giving the economy time to mend and that’s going to be supportive for the recovery in oil demand.
A committee made up of some ministers from OPEC+ alliance will meet on Thursday to discuss if the group’s production curbs are enough to prevent a glut.
The decline in U.S. oil inventories, along with rising demand suggests that the market is putting to rest much of the concern that demand is going in reverse.
Source: Bloomberg Pro Terminal
Chart: Used with permission from Bloomberg Finance L.P.