Connect with us

Hi, what are you looking for?

Commodities & Futures

Oil rises for a third day on expectations for fuel demand pickup

Commodities20 minutes ago (Jun 02, 2021 10:50PM ET)

(C) Reuters. FILE PHOTO: Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song

TOKYO (Reuters) – Oil prices rose for a third day on Thursday on expectations for a surge in fuel demand, particularly in the United States and Europe and China, later this year at the same time major producers are maintaining supply discipline.

Brent crude futures were up 49 cents, or 0.7%, at $71.84 a barrel by 0233 GMT, the highest since September 2019. The international benchmark gained 1.6% on Wednesday.

U.S. West Texas Intermediate crude futures rose 44 cents, or 0.6%, to $69.27 a barrel. Prices earlier rose to as much as $69.32, the most since 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, known as OPEC+, is that oil demand will exceed supply in the second half of 2021, which has spurred the recent run in prices.

OPEC+ data shows that by the end of the year oil demand will be 99.8 million barrels per day (bpd) versus supply of 97.5 million bpd.

This rebalancing will be led by resurgent demand in the United States, the world’s biggest oil user, from vehicle consumption this summer, along with rising fuel needs in China, the world’s second biggest oil consumer, and in the UK as it exits its COVID-19 lockdowns.

“The U.S. driving season is a period that sees higher-than-normal fuel consumption. UK traffic is now sitting above pre-pandemic levels,” CBA commodities analyst Vivek Dhar said in a note. “We continue to see the oil demand recovery led by the U.S., Europe and China.”

OPEC+ agreed on Tuesday continue with plans to ease supply curbs through July.

The OPEC+ meeting last 20 minutes, the quickest in the grouping’s history, suggesting strong compliance among members and the conviction that demand will recover once the COVID-19 pandemic shows sign of abating.

A slowdown in talks between the U.S. and Iran over the latter’s nuclear programme has also reduced expectations for Iranian oil supply to come back to the market this year.

The European Union envoy coordinating the discussions said he believed a deal would be struck at the next round of talks starting next week, though other diplomats cautioned that difficulties remain.

“The current talks in Vienna to revive the 2015 nuclear accord, which would see U.S. sanctions on Iran lifted, now look unlikely to find a resolution,” said CBA’s Dhar.

Oil rises for a third day on expectations for fuel demand pickup

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Stock

Stock Markets25 minutes ago (Jul 16, 2021 05:46PM ET) (C) Reuters. FILE PHOTO: Johnson & Johnson’s Neutrogena Cool Dry Sport sunscreen, which is part...

Tech

Builders, creators and developers, this one’s for you! TechCrunch has always been about discovering fresh solutions and shining the light on exciting, new products...

Stock

(C) Reuters. FILE PHOTO: Indian billionaire Gautam Adani speaks during an interview with Reuters at his office in the western Indian city of Ahmedabad...

Disclaimer: Wisegazette.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Wise Gazette. All Rights Reserved