While U.S. crude supplies have experienced a steady decline in recent times, oil has managed to retain its eight-month market highs. While an Energy Information Administration report showed a 754,000 decline in crude barrels last week, oil futures rose by 1.8% on the New York Stock Exchange.
These enduring highs are largely the result of optimism amid the recent breakthroughs in the development of a coronavirus vaccine. It is expected that once an impending rollout begins, oil, as well as the economy at large, will enjoy a strong rebound next year.
Another strong indicator of a large-scale recovery comes from the surging demand stemming from parts of Asia. A multitude of Indian and Chinese refiners issued tenders in their search for crude oil in January. This trend ended up contributing to rising prices as well.
Quinn Kiley, a portfolio manager at Tortoise, explained that the recent shift in oil demand falls in line with the widespread belief of an economic recovery.
He also commented that Tortoise expects to see a lot of balancing of localized inventories based on outages in the near future. Tortoise is an investment firm that handles around $8 billion in assets that are energy-related.
