Brent crude futures were higher at 16 cents, or 0.22%, at $71.51 a barrel by 1244 GMT. Brent reached its highest after September 2019 at $71.99. The international benchmark had increased 1.6% on Wednesday.
U.S. West Texas Intermediate crude futures climbed 14 cents, or 0.20%, to $68.97. Prices surged as high as $69.40, the strongest after October 2018, after growing 1.5% in the previous session.
The consensus between market forecasters, including the Organization of the Petroleum Exporting Countries (OPEC) and its partners within the broader OPEC+ group of producers, is that oil demand will outpace supply in the second half of 2021.
OPEC+ data reveals that by the end of the year, oil demand will be 99.8 million barrels per day (BPD) versus supply of 97.5 million BPD.
This rebalancing will be driven by resurgent demand in the United States, China, and United Kingdom. The U.S is the world’s largest oil user. China is the world’s second-biggest oil user.
According to American Petroleum Institute U.S. crude oil inventories dropped by more than 5 million barrels last week. Moreover, U.K. is on a rise from coronavirus lockdowns.
OPEC+ will Ease Supply Curbs
OPEC+ acknowledged on Tuesday to proceed with plans to ease supply curbs throughout July.
The OPEC+ meeting endured 20 minutes. It was the fastest in the grouping’s history. This implied robust compliance between members and the conviction that demand will improve once the coronavirus epidemic shows signs of abating.
Furthermore, a slowdown in talks within the United States and Iran over the latter’s nuclear program has also diminished expectations for returning Iranian oil supplies to the market this year.
The European Union envoy coordinating the negotiations believes there will be a deal at the next round of talks beginning next week. Nevertheless, other diplomats warned that difficulties remain.
PVM Oil associates cast suspicion on an extended rally as the contract-for-difference (CFD) curve indicates the physical market was in a contango structure. As a result, quick prices are lower than later dates. Oil futures are, on the contrary, backwardation structure.