Oil prices soared on Monday, strong demand during the summer driving season and the suspension of talks to renew Iran’s nuclear deal could lead to a resumption of crude supplies from OPEC manufacturers.
Brent crude for August 0825 GMT was up 23 cents, or 0.3%, at $ 73.74 a barrel. U.S. for July West Texas Intermediate (WTI) crude was up 29 cents, or 0.4%, at $ 71.93.
Both definitions have arisen over the past four weeks regarding the speed of global COVID-19 vaccines and the two hopes for summer travel. Spot premiums for crude in Asia and Europe have been raised for several months.
“The basic body demand picture of oil is positive,” said OANDA researcher Jeffrey Haley. “Despite the noise in the financial markets, the real world is on the right track and will require more energy when it reopens.”
Negotiations to amend the Iran nuclear deal were suspended on Sunday, with the country’s presidential election being won by hardline judge Ibrahim Raisi. The two ambassadors said they expect a gap of about 10 days.
Iranian and Western officials say Raisi’s rise is unlikely to change Iran’s negotiating position.
An agreement could lead Iran to export 1 million barrels a day from its storage facilities for more than six months, or 1% of its global supply.
U.S. Oil prices are supported by forecasts of limited growth in oil production, which gives the Organization of the Petroleum Exporting Countries (OPEC) more power to manage the market in the short term before a strong rise in shale oil production in 2022.
However, the initial indicator of future oil production is the U.S. Data from Rick’s number eight rose to 373 last week, the highest since April 2020, according to data from energy services company Baker Hughes.