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A Signal of Strong Short Term Demand in Oil Markets

Source The Ghana Report

This week, crude oil prices are inching higher, primarily driven by concerns over tightening supply. As of the latest trading sessions, April West Texas Intermediate (WTI) crude oil futures are showing an increase, currently up by 0.19% for the week.

This rise, when compared to the stability or fluctuations in previous weeks, highlights a growing concern among traders. They are actively watching for a potential breakout above the January 29 main top of $79.09, indicating a bullish sentiment in the market due to these supply concerns.

Spot vs. Futures Premium: A Bullish Indicator

This week’s significant development is the increasing premium of spot prices over near-date futures.

This widening gap, now more pronounced, signals a strong demand outlook in the short term. Contracts linked to near-term deliveries are reaching their highest premium in months. By providing specific figures or a comparison to previous months, readers can better grasp the market’s current state, which suggests a bullish outlook for crude oil due to robust immediate demand.

Refinery Recovery Enhancing Demand

The resurgence of U.S. refineries is boosting demand for crude oil. Operations at BP’s Indiana refinery and TotalEnergies’ Port Arthur refinery are improving, which is expected to elevate U.S. refinery run rates from 80.6% to 81.5%, according to a Reuters poll. This improvement in refinery operations, crucial for converting crude into usable products.

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