Oil prices edged higher on Thursday, supported by lower U.S. inventories, as investors waited for a decision from key producers on whether they would maintain or ease supply cuts in the second half of the year.
Brent crude for September gained 17 cents, 0.2%, to $74.79 a barrel by 0355 GMT
U.S. West Texas Intermediate crude for August was at $73.68 a barrel, up 21 cents, or 0.3%, close to its highest since 2018 of $74.45.
WTI rose more than 10% in June while Brent added over 8%, touching highs since 2018, as summer travel picked up and more people got vaccinated.
OPEC+ Meeting on Easing Oil Supply Curbs
Analysts had forecast a wider supply deficit globally in the second half as the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, maintained production cuts while demand rises.
“Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach,” ANZ analysts
Analysts at Citi bank said global oil market fundamentals should be robust enough to justify an easing of production cuts, adding that they were factoring a 1 million barrels per day (BPD) surge in OPEC supplies in August.
Even after accounting for higher OPEC+ production, Citi expects the market to remain in a deep deficit of more than 3 million BPD through the third quarter with a high probability of Brent hitting around $85.
In the United States, crude stockpiles fell last week for the sixth straight week in response to rising demand, data from the Energy Information Administration showed.
A drop in crude inventories at Cushing, Oklahoma, the delivery point for WTI, to the lowest since March 2020 also underpinned the U.S. benchmark, squeezing its discount to Brent to the narrowest since June 2020 on Wednesday.
Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from forecasts in May, a June Reuters poll showed.