Oil prices have seen increases of almost 3% during the week ending June 25 on the back of a brighter demand outlook and ahead of the crucial OPEC+ meeting where the world’s biggest oil-producing states are expected to decide on their production quota after July.
International benchmark Brent crude traded at $75.42 at 1100 GMT on Friday, posting more than a 2.54% rise from Monday when trade at 0729 GMT registered at $73.55 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $73.11 at the same time on Friday, increasing over 2.52% relative to $71.31 a barrel on Monday.
Prices started the week on an optimistic upswing with a delay in extra barrels from Iran coming to the market, given that US-Iran talks paused for the presidential elections in Iran.
Although Iran announced Wednesday that Washington agreed to remove all sanctions on Iran's oil and shipping and to take some senior Iranian political figures off a blacklist to revive Tehran's 2015 nuclear deal, the US on Thursday said it may rethink its approach towards Iran citing “serious differences” between the two countries.
As worldwide vaccination campaigns gain momentum and daily cases show a visible decrease especially in the big economies, the oil market has become tighter with a better-than-anticipated demand outlook to narrow the supply-demand gap.
According to Our World in Data, the publication that tracks the pace of vaccinations worldwide, 22.4% of the global population has received at least one dose of a COVID-19 vaccine as of June 25. Some 2.8 billion doses have been administered globally, and 40.8 million are now administered each day.
-Prices surpass new thresholds
During the week ending June 25, both benchmarks hit their highest level since 2018 when Brent traded at $76.92 on Oct. 31 and WTI hit $75.08 on Oct. 10.
Oil demand optimism was fueled further after US crude stocks fell by more than the market expected last week.
US commercial crude oil inventories fell by 7.6 million barrels, or 1.6%, to 459.1 million barrels, relative to the market expectation of a fall of 3.6 million barrels, according to data released by the country's Energy Information Administration (EIA) on Wednesday.
Investors are now focused on the next meeting of OPEC and non-OPEC oil-producing countries, including Russia, scheduled to meet on July 1 to discuss their production cut strategy after July.
The group is not expected to make significant production increases to avoid wide price fluctuations.
By Sibel Morrow