Oil edges higher with Opec+ output talks in spotlight
Brent crude futures rise with demand growth seen outstripping supply
25 June 2021 - 07:29
bySonali Paul
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Melbourne — Oil prices rose on Friday, heading for a fifth straight week of gains, with demand growth seen outstripping supply on bets that Opec+ producers will be cautious in returning more output to the market from August.
US West Texas Intermediate (WTI) crude futures rose 8c, or 0.1%, to $73.38 a barrel at 2.16am GMT, headed for a 2.4% gain for the week.
Brent crude futures climbed 7c, or 0.1%, to $75.63 a barrel, headed for a 2.9% jump for the week.
Both benchmark contracts hit their highest since October 2018 on Thursday.
All eyes are on Opec+ who are due to meet on July 1 to discuss further easing of their output cuts from August.
"[The market] certainly has momentum behind it. It’s really in the hands of Opec+," said Commonwealth Bank commodities analyst Vivek Dhar.
On the demand side, the key factors Opec+ will have to consider are strong growth in the US, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising Covid-19 cases and outbreaks in other locations, analysts said.
“The question is what does Opec+ do knowing that information. That’s going to determine where oil prices go,” Dhar said. “The risk is they end up being too conservative and we get [supply] deficit conditions past August.”
ANZ analysts predicted Opec+ would step up supply with a small increase of 500,000 barrels per day in August, adding to the 2.1- million they agreed to return to the market from May through July.
“We expect the Opec+ alliance will try to balance the market’s need for more supply against the fragile nature of the recovery in demand at next week’s meeting,” ANZ analysts said in a note to clients.
The prospect of sanctions being lifted on Iran and more of its oil hitting the market any time soon has dimmed, with a US official saying “serious differences” remain over a range of issues over Iran’s compliance with the 2015 nuclear deal.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil edges higher with Opec+ output talks in spotlight
Brent crude futures rise with demand growth seen outstripping supply
Melbourne — Oil prices rose on Friday, heading for a fifth straight week of gains, with demand growth seen outstripping supply on bets that Opec+ producers will be cautious in returning more output to the market from August.
US West Texas Intermediate (WTI) crude futures rose 8c, or 0.1%, to $73.38 a barrel at 2.16am GMT, headed for a 2.4% gain for the week.
Brent crude futures climbed 7c, or 0.1%, to $75.63 a barrel, headed for a 2.9% jump for the week.
Both benchmark contracts hit their highest since October 2018 on Thursday.
All eyes are on Opec+ who are due to meet on July 1 to discuss further easing of their output cuts from August.
"[The market] certainly has momentum behind it. It’s really in the hands of Opec+," said Commonwealth Bank commodities analyst Vivek Dhar.
On the demand side, the key factors Opec+ will have to consider are strong growth in the US, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising Covid-19 cases and outbreaks in other locations, analysts said.
“The question is what does Opec+ do knowing that information. That’s going to determine where oil prices go,” Dhar said. “The risk is they end up being too conservative and we get [supply] deficit conditions past August.”
ANZ analysts predicted Opec+ would step up supply with a small increase of 500,000 barrels per day in August, adding to the 2.1- million they agreed to return to the market from May through July.
“We expect the Opec+ alliance will try to balance the market’s need for more supply against the fragile nature of the recovery in demand at next week’s meeting,” ANZ analysts said in a note to clients.
The prospect of sanctions being lifted on Iran and more of its oil hitting the market any time soon has dimmed, with a US official saying “serious differences” remain over a range of issues over Iran’s compliance with the 2015 nuclear deal.
Reuters
Oil climbs on strong demand from drivers and pause in Iran nuclear talks
EDITORIAL: Ethanol regulatory framework would sweeten SA’s fortunes
Oil slips, but remains on course to finish week hardly changed
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Oil prices rise on expectations about European fuel demand
Indian refining giant Reliance Industries unveils new clean energy business ...
Driving-season demand pushes oil prices higher
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.