WTI jumps sharply on STEO report

U. S. WTI sharply advances in the New York session, up by almost 2%, trading at $82.93 per barrel. Earlier, Tuesday, oil retreated under the $81.00 psychological figure, but later found support at the 1-hour 50-simple moving average at $80.99, which capped the downward pressure on the U. S. crude oil benchmark.

WTI recovered some early losses on positive news of the EIA cutting the forecast for oil demand for 2022.

The Short Term Energy Outlook (STEO) predicted that the market would have an excess supply early in 2022 and reported that prices would fall in December from current levels.

Investors and traders were impatiently waiting for the report, as sources said the Biden administration was considering tapering the U. S. Specific Petroleum Reserves (SPR).

Vaccination rates increased and COVID-19 cases dropped across the globe. Easing lockdowns, in turn, increased mobility of people, consequently spurring a higher oil demand which is expected to be reasonably tight for the next 12 months, and a price spike to $100 a barrel is on the cards.

The White House has exerted pressure on OPEC and its allies to increase the crude oil output, but OPEC+ stayed put, sticking to its 400K crude oil barrel target per day.