Global benchmark Brent futures closed at $ 76.18 while U.S. West Texas Intermediate crude hit $ 74.05 – the highest closes for the two since October 2018.
Oil prices hit their highest level since October 2018 on Friday, placing both benchmarks for a fifth straight week on expectations that demand growth will outpace supply and OPEC + will be cautious coming back more of crude on the market from August.
Global benchmark Brent futures rose 62 cents, or 0.8%, to $ 76.18 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 75 cents , or 1.0%, to $ 74.05.
These were the highest closings for both benchmarks since October 2018 and both contracts rose more than 3% for the week.
“Crude prices have recovered following an improvement in demand outlook and beyond expectations the market will remain tight as OPEC + is expected to provide only a small boost to production at the July 1 ministerial meeting “said Edward Moya, senior market analyst at OANDA.
All eyes are on the Organization of the Petroleum Exporting Countries, Russia and their allies – together called OPEC +, which are due to meet on July 1 to discuss further easing their production cuts from August. .
“The producer group has enough room to increase supply without derailing the decline in oil inventories, given the more optimistic demand outlook,” said Stephen Brennock of oil broker PVM.
On the demand side, the key factors OPEC + will need to consider are strong growth in the United States, Europe and China, bolstered by the rollout of coronavirus vaccines and the reopening of economies, analysts say. who said this had been countered by the increase in COVID-19 cases and outbreaks in other places.
The prospect of the lifting of sanctions against Iran and the imminent arrival of more of its oil on the market has faded, with a US official saying serious differences remain on a range of issues regarding the Tehran’s compliance with the 2015 nuclear agreement.
The lack of an interim agreement between the United Nations nuclear watchdog and Iran on monitoring atomic activities is a serious concern that has been communicated to Tehran, US Secretary of State Antony Blinken said on Friday.
Iran did not respond to the UN nuclear watchdog over extending a surveillance deal that expired overnight, the agency said on Friday, hours after Washington warned that it would not not extending it would undermine efforts to revive the 2015 Iran nuclear deal.
“If an agreement with Iran is not reached by July 1, we expect OPEC + will revert to setting quotas month by month and announce a modest increase in production for August at its meetings. next week, “analysts at ClearView Energy Partners LLC said in a report.
Meanwhile, the number of U.S. oil rigs, an early indicator of future production, fell from one to 372 this week, according to energy services firm Baker Hughes Co. Despite the slight drop, the number of rigs fell from one to 372 this week. forms rose 13 in June – its 10th monthly increase. – and rose by 48 in the second quarter, its third consecutive quarterly increase.