Oil climbed for the third consecutive session on Friday and OPEC+ producers are cautious about returning production to the market from August.
Oil posted its fifth straight weekly gain as demand expected to outpace supply.
Brent crude futures rose 6 cents, or 0.1%, to $75.62 a barrel at 0456 GMT.
West Texas Intermediate (WTI) crude futures also rose 6 cents, or 0.1%, to $73.36 a barrel.
Both benchmark contracts hit their highest levels since October 2018 on Thursday. Brent is headed for a 2.9% gain this week and WTI is up 2.4% this week.
Expectations of contraction in the global market support crude as OPEC+ curbs supply and US oil stocks fall and demand rises.
All eyes are on the Organization of the Petroleum Exporting Countries and its allies, including Russia, which will meet on 1 July to discuss further easing of production cuts from August. It’s up to OPEC+ to manage the momentum behind the market.
On the demand side, key factors for OPEC+ to consider are continued vaccine launches and strong growth supported by the reopening of economies in the US, Europe and China. However, demand is being offset by rising COVID-19 cases and outbreaks in some countries.
OPEC+ needs to carefully calibrate production increases from August to meet rising demand without causing significant price fluctuations. The market has probably already priced in an August hike.
Analysts predict that OPEC+ will increase supply with a small increase of 500,000 bpd in August, in addition to the 2.1 million bpd they agreed to return to the market from May to July.
While significant differences remain on a number of issues related to Iran’s compliance with the 2015 nuclear deal, sanctions against Iran are being lifted and it looks like more oil will enter the market soon.
