Oil prices rallied this week as traders absorbed new – and elevated – forecasts for 2021 amid signs that U.S. inventories could trail rising demand as the year unfolds.

WTI consensus

Key oil benchmarks traded near 13-month highs this week, with West Texas Intermediate (WTI) crude surpassing $63/bbl on Thursday and Brent crude hovering around $67. WTI prices descended into negative territory last April amid the immediate fallout of the coronavirus pandemic. They gradually recovered over the rest of the year and reached $48 at the close of 2020. Prices have since steadily climbed.

U.S. oil inventories have declined throughout February, with frigid temperatures spurring demand for heating fuels that offset increases in gasoline and crude stockpiles. Total domestic petroleum stocks fell 13.8...