Oil prices climbed for a third straight session on Friday, on track for a fifth consecutive weekly gain, as demand growth is expected to outstrip supply on bets that OPEC+ producers will be cautious in returning more output to the market from August.
Brent crude futures rose 6 cents, or 0.1%, to $75.62 a barrel at 0456 GMT, heading for a 2.9% jump for the week.
U.S. West Texas Intermediate (WTI) crude futures were also up 6 cents, or 0.1%, at $73.36 a barrel, headed for a 2.4% weekly gain.
Both benchmark contracts settled at their highest levels since October 2018 on Thursday.
OPEC+ Meeting on Oil Supply
All eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies, together called 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+. The question is what does OPEC+ do knowing that information. That’s going to determine where oil prices go. The risk is they end up being too conservative and we get (supply) deficit conditions past August.” Commonwealth Bank commodities analyst Vivek Dhar
On the demand side, the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising Covid-19 cases and outbreaks in other locations, analysts said.
“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
The prospect of sanctions being lifted on Iran and more of its oil hitting the market anytime soon has dimmed, with a U.S. official saying “serious differences” remain over a range of issues over Iran’s compliance with the 2015 nuclear deal.