Oil prices climbed in early Asian trade on Monday, stimulated by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week for supply guidance.
Brent crude futures for August nudged up 7 cents, or 0.1%, to $68.79 a barrel by 0038 GMT after settling at their highest in two years on Friday.
U.S. West Texas Intermediate crude for July was at $66.45 a barrel, up 13 cents, or 0.2%.
Both contracts are on track for a second monthly gain as analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports.
Iran has been in talks with world powers since April working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact.
“We see demand outstripping supply in the order of 650,000 barrels per day and 950,000 BPD in Q3 and Q4 respectively, this includes 500,000 BPD of increase in Iranian output. “ANZ analysts.
OPEC+ Meeting on Oil Supply
The Organization of the Petroleum Exporting Countries and their allies together known as OPEC+ will meet on Tuesday.
Investors are looking for any clues on the next stage of the group’s supply policy amid growing expectations for demand to accelerate through the end of the year. As for July, all but four of 24 analysts and traders predicted the alliance would ratify a planned increase of 840,000 barrels a day.
However, oil is poised for a second straight monthly gain as the U.S., China and parts of Europe lead a robust demand recovery from the Covid-19 pandemic, despite a virus comeback across Asia. American gasoline stockpiles have declined and consumption gained in the lead up to the Memorial Day weekend, which marks the start of the summer driving season and peak fuel demand.
Crude output in the United States soared 14.3% in March, the Energy Information Administration reported on Friday, while Baker Hughes data showed crude and gas rigs rising for the 10th month in a row last week.
