Oil prices surged on Monday as Asian trade began, supported by good prospects for fuel demand growth in the next quarter, as investors waited for the OPEC + meeting this week to see how producers react.
Brent futures for August rose 50 cents, or 0.7%, to $ 69.22 a barrel at 6:14 a.m. GMT after leveling off at their two-year high on Friday. US West Texas Intermediate crude for July was $ 66.87 a barrel, up 55 cents, or 0.8%.
The US and UK markets are closed on Mondays due to public holidays.
Both contracts are on track for a second monthly gain, with analysts predicting that growth in oil demand will exceed supply despite the possible return of Iranian crude and condensate exports.
Iran has been in talks with world powers since April, working on measures Tehran and Washington need to take on nuclear sanctions and activities to return to full compliance with the 2015 nuclear pact. Read More
“We are seeing demand exceed supply by around 650,000 bbl / d and 950,000 b / d in Q3 and Q4 respectively,” ANZ analysts said, adding that this includes 500,000 b / d increase in Iranian production.
The Organization of the Petroleum Exporting Countries and their allies, including Russia, will meet on Tuesday.
The group known as OPEC + is expected to stay the course on plans to gradually ease supply cuts through July. Read more
“We do not believe that Iran derails any deal with OPEC +, therefore the already agreed outcome of the cuts from July should continue and is already integrated into the balances,” said Virendra Chauhan, analyst at ‘Energy Aspects.
Separately, U.S. crude production climbed 14.3% in March, the Energy Information Administration reported on Friday, while data from Baker Hughes showed oil and gas rigs increased for a 10th consecutive month last week. Read more
EIA data also showed that a shipment of 1.033 million barrels of Iranian crude oil was recorded as landing on US shores in March, the first shipment of Iranian oil to the United States since 1991. read more
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