Crude oil rates today: Brent continues to hold above $86 per barrel on improved demand prospects

Crude oil prices held ground in the early trading hours of Tuesday, continuing the momentum seen since last week when rates improved on brighter demand prospect for the second half of this year.

Global crude benchmark Brent jumped 0.08%, with its futures for August delivery trading at $86.06 per barrel at 0015 hours GMT.

The futures of U.S. West Texas Intermediate (WTI) crude were up 11 cents or 0.13%, trading at $81.74 a barrel.

Brent remaining above $86 per barrel will mark a positive trend for the global oil market, analysts said, pointing out that the benchmark crude has largely remained below $83 per barrel in recent months despite the tensions in the Middle East. Similarly, WTI has largely hovered around $78 a barrel despite the geopolitical jitters.

Optimism over demand outlook

The upward movement in oil prices is linked to the revision in demand outlook by the U.S. Energy Information Administration (EIA), experts said. The agency, last week, said it expects American oil output to rise to 310,000 barrels per day (bpd) in 2024.

The revised forecast is 40,000 bpd higher as compared to the expectation shared by the EIA in May.

The Organisation of Petroleum Exporting Countries (OPEC), in its monthly report, retained the forecast of 2.25 million bpd oil demand in 2024. The forecast was unchanged as compared to the last month, despite the International Energy Agency (IEA) trimming its demand projection.

The IEA, in its June report, has slashed its demand forecast for 2024 by around 100,000 bpd to 960,000 bpd. The OPEC and EIA, however, have contradicted its projection.

Another factor that has positively affected the oil prices is the dwindling of US crude stockpile. The US Energy Information Administration released data on Thursday that showed the US crude stockpile dropping by 2.5 million barrels to 457.1 million barrels in the week ended June 14.

The decline was sharper than a drawback of 2.2 million barrels estimated in a Reuters poll of analysts.