Oil prices rose for a second day on Thursday amid a larger-than-expected drop in US crude and gasoline stockpiles confirming the outlook for strong fuel demand and doubts on the future of the 2015 Iran nuclear deal that could end the US sanctions on crude oil exports from Iran.
Iran told the US to lift the oil sanctions, the US said that there has not been agreement on anything. There are still gaps in talks on the 2015 Iran nuclear deal.
Iran said on Wednesday that the United States has agreed to lift all sanctions on Iran’s oil and shipping. However, Washington said in talks that nothing was agreed until everything was agreed.
Brent crude futures rose 8 cents, or 0.1%, to $75.27 a barrel at 0453 GMT after gaining 0.5% on Wednesday.
West Texas Intermediate (WTI) crude futures rose 9 cents, or 0.1%, to $73.17 a barrel after rising 0.3% on Wednesday.
Both benchmarks hit their highest levels since October 2018 on Wednesday, but later in the session the gains were down as profits capped after the US inventory report. Prices in Asian trading continued to rise on Thursday.
The U.S. Energy Information Administration said crude oil inventories fell 7.6 million barrels in the week to 459.1 million barrels, at the lowest level since March 2020.
The data were encouraging, as not only crude oil inventories but also gasoline stocks fell, indicating healthy demand and tight supply. Gasoline inventories fell 2.9 million barrels per week against analysts’ expectations for an increase of 833,000 barrels.
The OPEC+ meeting on July 1 focused on easing supply restrictions. Oil prices are expected to remain in the current high range for a while, unless OPEC+ decides next week to increase production more than expected for August and beyond.
Brent has gained more than 45% this year, thanks to increased demand as OPEC+-led supply disruptions and the easing of COVID-19 restrictions, and some industry executives are talking about a return to $100 for crude for the first time since 2014.
We could likely see a short-term correction ahead of the OPEC+ meeting, but the market trend continues to rise as the supply-demand balance tightens.
