Oil rose towards $72 a barrel on Friday to hover near a two-year high amid optimism over improving demand and on OPEC+ supply discipline. Slow progress of the Iran nuclear talks also offered some support.
Benchmark Brent crude futures rose half a percent to $71.65 a barrel and were on track for over 2 percent gain this week. WTI crude futures for July delivery were up half a percent at $69.16 per barrel.
There have been a raft of bullish calls on the demand outlook despite the patchy roll-out of anti-coronavirus vaccinations around the globe and concerns surrounding high infections in countries like Brazil and India.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have predicted a solid demand in recovery in the United States and China, the world’s two biggest oil consumers, but stuck to their plan to ease supply controls gradually.
A weekly supply report on Thursday showed U.S. crude inventories dropped more than expected last week, heading into the summer.
Data from the U.S. Energy Information Administration (EIA) showed crude inventories in the country dropped by 5.1 million barrels last week, more than twice the expected drop.
As market tightens, Saudi Arabia increased oil prices for customers in its main market of Asia. State energy firm Saudi Aramco hiked its key Arab Light grade for July shipments to Asia by 20 cents to $1.90 a barrel above a benchmark.