Oil prices soared on Wednesday as a decline in US crude inventories bolstered Opec's bullish demand forecast, whereas the market expected new information on the Colonial Pipeline outage.

West Texas Intermediate (WTI) crude futures in the US gained 29 cents, or 0.44%, to $65.57 a barrel at 0646 GMT, following a 36 cent gain on Tuesday.

Brent crude futures rose 31 cents, or 0.45%, to $68.86 a barrel, following a 23 cent rise on Tuesday.

“Oil investors continued their wait-and-see attitude to the overnight noise and tail-chasing seen in other," wrote Jeffrey Halley, senior market strategist at OANDA, in a statement on Wednesday.

“The Colonial pipeline cyberattack story continues, triggering material shortages in the Eastern United States.”

On Tuesday, fuel stations from Florida to Virginia ran out of gasoline as drivers tried to fill up their tanks, and petrol prices soared.

According to the American Automobile Association, unleaded fuel rates in the US reached an all-time high of $2.99 per gallon, the highest since November 2014.

“Whilst the sustained disruption will be favorable for refined product rates, this could tend to weigh on crude oil prices if refiners on the US Gulf Coast are pressured to cut run rates owing to a build-up of refined product stockpiles in PADD3,” ING analysts wrote in a report published on Wednesday.

Colonial Pipeline has stated that it plans to get a substantial portion of the network operational towards the end of the week.

Oil prices were boosted by the current forecast from the Organization of the Petroleum Exporting Countries (Opec), which maintained its prediction for a solid rebound in global oil consumption in 2021, with development in China and the United States outstripped the impact of the coronavirus emergency in India.

Opec expects demand to increase by 5.95 million bpd this year, unchanged from its estimate last month. It reduced its demand forecast for the second quarter by 300,000 bpd due to a surge in COVID-19 outbreaks in India.

As per two market reports, reports from the American Petroleum Institute industry group revealed that crude oil stocks in the US dropped by 2.5 million barrels this week ending May 7, which was marginally less than anticipated.

The withdrawal occurred before the Colonial Pipeline being targeted by a cyberattack last Friday, prompting the pipeline, which carries more than 2.5 million barrels of fuel every day, to close down. The global stock market's losing streak reached its longest in two months on Wednesday, as rising oil rates and rising inflationary pressure in the US spurred bets on earlier interest rate rises and higher bond yields.

Following Tuesday's slump, European equity markets recovered slowly, with the STOXX 600 index rising 0.3 %

The sentiment was boosted by remarks from the European Commission that the eurozone would recover more than planned from its COVID-19 recession, and figures showing Britain's pandemic-ravaged economy expanded faster than expected in March.

MSCI's widest index of Asia-Pacific shares outside Japan fell 0.8 % after hitting a low on March 26.

After setting new highs previously in the week, the MSCI global stock index was down 0.2 % on Friday, its third straight day of declines, the longest such streak since March 4.

Investors were concentrating on the US Labor Department's consumer price index survey, which was set to be published at 1230 GMT, with economists predicting a 3.6 % increase in year-on-year inflation, helped by last April's low base.

Treasury yields in the US stayed trapped in a narrow range. The yield on benchmark 10-year Treasuries fell to 1.6183 %, just below late-March highs which are below the 1.9 % average seen at the start of 2020 before the coronavirus pandemic.

Bond yields in the eurozone remained below recent highs reached on Tuesday. Germany's 10-year yield fell 1 basis point to -0.17 % after reaching a high of -0.152 % on Tuesday, the maximum since March 2020.

Analysts believe the latest slump was caused by a combination of inflation expectations and certain investors reducing their exposure to overstretched stocks or sectors.

“It's a war between two tales: one of reflation and roaring 20s, with fiscal stimulus generating higher levels of growth; while the other is the lower-for-longer theory, where eventually inflation seems difficult to produce and interest rates remain low,” says Kiran Ganesh, head of multi-asset at UBS Global Wealth Management in London.

“These two theories are contradictory and exist in the minds of investors.”

Japan's Nikkei dropped 1.9 % after reversing early losses, while Taiwan's benchmark index fell as much as 6 % from all-time highs to levels seen in February on concerns that the country's COVID-19 warning level would be raised in the coming days, leading to the closing of stores selling non-essential goods as infections increase.

Futures for the S&P 500 fell 0.4 %, while futures for the tech-heavy Nasdaq fell 0.6 %

Analysts, wondered that the wider equities sell-off will last longer in simple accommodative regulation and fiscal generosity.