SINGAPORE: Oil prices rose for a second session on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the US secretary of state said sanctions against Tehran were unlikely to be lifted.
Brent crude futures were up 37 cents, or 0.5 percent, at $72.59 a barrel at 0520 GMT and earlier rose to $72.83, the highest since May 20, 2019. Brent rose 1 percent on Tuesday.
US West Texas Intermediate (WTI) crude futures jumped 39 cents, or 0.5 percent, to $70.44 a barrel after rising to as high as $70.62, the most since Oct. 17, 2018. WTI prices climbed 1.2 percent on Tuesday.
“Improved demand outlook appears to be bolstering crude oil prices, as the successful vaccine rollouts and summer driving season in the United States and Europe continues to support fuel demand,” said Margaret Yang, a strategist at Singapore-based DailyFX.
Recent traffic data suggests travelers are hitting the roads as restrictions ease, ANZ Research analysts said in a note, pointing to TomTom data which showed traffic congestion in 15 European cities had hit its highest since the coronavirus pandemic began.
On Tuesday, the US Energy Information Administration forecast fuel consumption growth this year in the United States, the world’s biggest oil user, would be 1.49 million barrels per day (bpd), up from a previous forecast of 1.39 million bpd.
In another positive sign, industry data showed US crude oil inventories fell last week, in line with analysts’ expectations, according to a Reuters poll.
The American Petroleum Institute reported crude stocks fell by 2.1 million barrels in the week ended June 4, two market sources said, citing the data.
Price gains had been capped in recent weeks as oil investors had been assuming that sanctions against Iranian exports would be lifted and oil supply would increase this year as Iran’s talks with western powers on a nuclear deal progressed.
However US Secretary of State Antony Blinken said on Tuesday that even if Iran and the United States returned to compliance with a nuclear deal, hundreds of US sanctions on Tehran would remain in place.
Oil prices climb on signs of strong fuel demand recovery
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Oil prices climb on signs of strong fuel demand recovery
- Recent traffic data suggests travelers are hitting the roads as restrictions ease
Work suspended on Riyadh’s massive Mukaab megaproject: Reuters
RIYADH: Saudi Arabia has suspended planned construction of a colossal cube-shaped skyscraper at the center of a downtown development in Riyadh while it reassesses the project's financing and feasibility, four people familiar with the matter said.
The Mukaab was planned as a 400-meter by 400-meter metal cube containing a dome with an AI-powered display, the largest on the planet, that visitors could observe from a more than 300-meter-tall ziggurat — or terraced structure —inside it.
Its future is now unclear, with work beyond soil excavation and pilings suspended, three of the people said. Development of the surrounding real estate is set to continue, five people familiar with the plans said.
The sources include people familiar with the project's development and people privy to internal deliberations at the PIF.
Officials from PIF, the Saudi government and the New Murabba project did not respond to Reuters requests for comment.
Real estate consultancy Knight Frank estimated the New Murabba district would cost about $50 billion — roughly equivalent to Jordan’s GDP — with projects commissioned so far valued at around $100 million.
Initial plans for the New Murabba district called for completion by 2030. It is now slated to be completed by 2040.
The development was intended to house 104,000 residential units and add SR180 billion to the Kingdom’s GDP, creating 334,000 direct and indirect jobs by 2030, the government had estimated previously.
(With Reuters)
