Crude oil prices rose sharply on Wednesday, extending gains from the previous session, amid rising hopes about a pick up in energy demand, and on the decision of OPEC and its allies to gradually increase crude production.

Reports that there will be a delay in supply from Iran due to the slow pace of talks over the nuclear deal issue contributed as well to the uptick in oil prices. According to an Iranian official, talks between Iran and world powers with regard to revival of a 2015 nuclear deal are likely to be finalized in August.

West Texas Intermediate Crude oil futures for July ended up by $1.11 or about 1.6% at $68.83 a barrel, the highest close since October 2018. WTI futures for July ended up by $1.40 or about 2.1% at $67.72 a barrel on Tuesday.

Brent Crude futures gained $1.06 or 1.51% at $71.31 a barrel.

After a meeting on Tuesday, the Organization of the Petroleum Exporting Countries and its allies agreed to gradually ease supply curbs through July.

Comments from Saudi Energy Minister Prince Abdulaziz bin Salman that he expects oil demand in the U.S. and China to see a significant recovery and the acceleration in vaccine rollouts will likely lead to a “further rebalancing of the global oil market,” further supported oil prices.

Traders looked ahead to weekly inventory reports from the American Petroleum Institute (API) and Energy Information Administration (EIA).

The material has been provided by InstaForex Company – www.instaforex.com

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