Jan. 21 (Bloomberg) -- Brent crude rose for the first time in four days after the International Energy Agency raised its forecast for global oil demand on a strengthening economy.
Futures gained as much as 1.6 percent, and West Texas Intermediate futures jumped to a two-week high. World consumption will climb by 1.3 million barrels a day this year to a record 92.5 million, the IEA said today in its monthly Oil Market Report. The increase of 90,000 barrels a day from last month’s forecast follows the first year of annual demand growth in developed nations since 2010.
“The IEA report projected this year’s demand will be higher and that’s affecting Brent,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “If we get good economic growth, which looks increasingly likely, demand will be stronger.”
Brent for March settlement climbed $1.48, or 1.4 percent, to $107.83 a barrel on the London-based ICE Futures Europe exchange at 9:33 a.m. The volume of all contracts traded was 29 percent more than the 100-day average.
WTI for February delivery, which expires today, rose 51 cents, or 0.5 percent, to $94.88 a barrel on the New York Mercantile Exchange. It touched $95.20 in intraday trading, the highest level since Jan. 3. The more-active March contract gained 57 cents to $95.16. Floor trading in the U.S. was closed yesterday for the Martin Luther King Jr. Day holiday, and transactions will be booked today for settlement purposes.
Brent was at a $12.67 premium to WTI, the U.S. benchmark, compared with $11.89 on Jan. 17 for March contracts.
Global oil demand growth in 2014 will be led by China, which will account for about a third of the increase, the Paris- based IEA said. The country’s daily oil consumption will reach 10.49 million barrels. The U.S., the single-biggest driver of growth last year, will use 19 million barrels a day of oil, up from 18.9 million in 2013.
Higher forecasts for global fuel demand prompted the IEA to increase estimates for the amount of crude needed from the Organization of Petroleum Exporting Countries. OPEC’s 12 members, responsible for about 40 percent of global oil supplies, will need to provide an average of 29.4 million barrels a day in 2014, or about 200,000 more than the IEA had forecast in last month’s report.