By Sonali Paul
MELBOURNE (Reuters) – Oil costs rose on Friday, heading for a fifth straight week of positive aspects, with demand development seen outstripping provide on bets that OPEC+ producers will likely be cautious in returning extra output to the market from August.
U.S. West Texas Intermediate (WTI) crude futures rose 8 cents, or 0.1%, to $73.38 a barrel at 0216 GMT, headed for a 2.4% achieve for the week.
Brent crude futures climbed 7 cents, or 0.1%, to $75.63 a barrel, headed for a 2.9% bounce for the week.
Each benchmark contracts hit their highest since October 2018 on Thursday.
All eyes are on the Group of the Petroleum Exporting International locations, Russia and allies – collectively referred to as OPEC+ – who’re as a result of meet on July 1 to debate additional easing of their output cuts from August.
“(The market) definitely has momentum behind it…It is actually within the fingers of OPEC+,” stated Commonwealth Financial institution commodities analyst Vivek Dhar.
On the demand aspect, the important thing components OPEC+ should take into account are robust development in the US, Europe and China, bolstered by vaccine rollouts and economies reopening, offset by rising COVID-19 circumstances and outbreaks in different places, analysts stated.
“The query is what does OPEC+ do understanding that data. That is going to find out the place oil costs go,” Dhar stated. “The chance is that they find yourself being too conservative and we get (provide) deficit circumstances previous August.”
ANZ analysts predicted OPEC+ would step up provide with a small enhance of 500,000 barrels per day in August, including to the two.1 million bpd they agreed to return to the market from Might by way of July.
“We anticipate the OPEC+ alliance will attempt to steadiness the market’s want for extra provide towards the delicate nature of the restoration in demand at subsequent week’s assembly,” ANZ analysts stated in a be aware to shoppers.
The prospect of sanctions being lifted on Iran and extra of its oil hitting the market anytime quickly has dimmed, with a U.S. official saying “severe variations” stay over a spread of points over Iran’s compliance with the 2015 nuclear deal.
(Reporting by Sonali Paul; enhancing by Richard Pullin)
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