Oil prices rose for a third day on Thursday in anticipation of rising fuel demand by the end of this year, especially in the US and Europe, and China, while large manufacturers have been adhering to supply discipline.
After reaching its highest level since September 2019, Brent crude futures rose 40 cents, or 0.6%, to $ 71.75 a barrel at 0635 GMT. The international benchmark rose 1.6% on Wednesday.
U.S. West Texas Intermediate crude futures rose 34 cents, or 0.5%, to $ 69.17. Previous prices rose to a high of $ 69.40 from October 2018, after gaining 1.5% in the previous session.
The consensus among market forecasters, including the Organization of the Petroleum Exporting Countries and its allies, OPEC +, is that oil demand will exceed supply in the second half of 2021, with recent prices rising.
OPEC + data show that oil demand by the end of the year was 99.8 million barrels per day (BPD) and 97.5 million BPD supply.
As the world’s second-largest oil consumer exits its COVID in China and the UK, the need for the world’s second-largest oil consumer to re-emerge from vehicle consumption this summer, leading to this restructuring 19 locks.
“U.S. driving season is seen as higher than normal fuel consumption. UK traffic is now higher than pre-epidemic levels,” CBA Materials Analyst Vivek Thar said in a note. “We continue to see oil demand recovery led by the US, Europe, and China.”
U.S. crude oil inventories fell by more than 5 million barrels last week, according to two market sources, citing U.S. Petroleum Corporation figures on Wednesday.
OPEC + agreed on Tuesday to continue plans to ease supply barriers in July.
The OPEC + meeting lasted 20 minutes, which is the fastest in the group’s history, suggesting strong consensus among members and the hope that demand will recover once COVID-19 shows signs of reducing infection.
The slowdown in negotiations between the US and Iran over the latter nuclear program has also dampened expectations that Iranian oil supplies will return to the market this year.
The EU ambassador, who is coordinating the talks, said he hoped an agreement would be reached in the next round of talks starting next week, but warned other diplomats that there were difficulties.
“The current negotiations in Vienna to renew the 2015 nuclear deal will see the lifting of US sanctions on Iran and it is unlikely to find a resolution now,” said Thar of the CBI.
