UPDATE 8-Oil up $1.50/bbl as demand recovery seen tightening supply

Reuters

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    * Demand seen outstripping supply in second half of year
    * U.S. crude inventories rise but still falling at Cushing -
EIA
    * Brent seen at mid to high-$70s for rest of year -Morgan
Stanley 

 (Updates prices, market activity and comments to settlement)
    By Laila Kearney
    NEW YORK, July 22 (Reuters) - Oil prices rose about $1.50 a
barrel on Thursday, extending gains made in the previous three
sessions on expectations of tighter supplies through 2021 as
economies recover from the coronavirus crisis.
    Brent crude  LCOc1  settled at $73.79 a barrel, up $1.56, or
2.2%, while U.S. West Texas Intermediate (WTI) settled at $71.91
a barrel, rising $1.61, or 2.3%.
    "The death of demand was greatly exaggerated," said Phil
Flynn, senior analyst at Price Futures Group in Chicago. "Demand
is not going away, so we're back looking at a very tight
market."
    Members of the Organization of the Petroleum Exporting
Countries and other producers including Russia, collectively
known as OPEC+, agreed this week on a deal to boost oil supply
by 400,000 barrels per day from August to December to cool
prices and meet growing demand.
    But as demand was still set to outstrip supply in the second
half of the year, Morgan Stanley forecast that global benchmark
Brent will trade in the mid to high-$70s per barrel for the
remainder of 2021.
    "In the end, the global GDP (gross domestic product)
recovery will likely remain on track, inventory data continues
to be encouraging, our balances show tightness in H2 and we
expect OPEC to remain cohesive," it said.
    Russia may start the process of banning gasoline exports
next week if fuel prices on domestic exchanges stay at current
levels, Energy Minister Nikolai Shulginov said, further
signalling tighter oil supplies ahead.  urn:newsml:reuters.com:*:nR4N2NZ020
    Crude inventories in the United States, the world's top oil
consumer, rose unexpectedly by 2.1 million barrels last week to
439.7 million barrels, up for the first time since May, U.S.
Energy Information Administration data showed.  EIA/S 
    Inventories at the Cushing, Oklahoma crude storage hub and
delivery point for WTI, however, has plunged for six continuous
weeks, and hit their lowest since January 2020 last week.
    "Supplies fell further by 1.3 million barrels to the lowest
level since early last year, theoretically offering support to
the WTI curve," said Jim Ritterbusch of Ritterbusch and
Associates.
    Gasoline and diesel demand, according to EIA figures, also
jumped last week.
    Barclays analysts also expected a faster-than-expected draw
in global oil inventories to pre-pandemic levels, prompting the
bank to raise its 2021 oil price forecast by $3 to $5 to average
$69 a barrel. 
    

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Brent and WTI prices    https://refini.tv/3w2pz6N
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 (Additional reporting by Ron Bousso in London and Jessica
Jaganathan in Singapore
Editing by Marguerita Choy and Kirsten Donovan)
 ((Laila.kearney@thomsonreuters.com; (917) 809-0054))

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