Oil closes up 2% amid positive demand outlook

Oil drilling rigs

Oil prices closed higher today, May 8, as concerns on economic recession and banking crisis in the United States receded.

"The market is less worried about a banking crisis that could lead to a recession and hurt demand," Reuters reported, citing Phil Flynn, an Analyst at Price Futures Group.

Goldman Sachs maintained its bullish outlook for crude, as the investment bank said in a report over the weekend: “Our forecast remains that Brent rises to $95 per barrel by December and $100 per barrel by April 2024 as we expect large deficits in H2.”

Financial services company ANZ maintained that the oil slump could bottom out soon, with global oil demand set to grow by 2 million barrels per day, keeping the market under-supplied throughout 2023.

The OPEC+ plan to reduce production by 1.16 million barrels per day entered into force at the beginning of May and will continue until the end of 2023. OPEC’s monthly report, to be issued on May 11, will reveal the supply and demand expectations.

In terms of trading, Brent crude futures for July delivery increased by 2.3%, or $1.71, to close at $77.01 a barrel.

WTI crude for June delivery rose by 2.6%, or $1.82, to record $73.16 per barrel.