Crude prices rose again on Monday with WTI breaching $71 per barrel levels and Brent breaching $73 per barrel levels as demand-push factors accelerated and risk of supply shocks abated. The upward trajectory of the black liquid continued for the fourth week as progress in vaccinations triggered travel freedom and the mobility so unleashed fuelled oil demand.
Brent crude for August settlement rose to a high of $73.63 in early trade, and is currently at $73.40, a surge of 0.98 percent from previous close. Likewise, West Texas Intermediate crude for July settlement rose to a high of $71.69 in early trade and is currently trading at $71.47, higher by 0.80 percent from previous close.
The International Energy Agency (IEA)’s Oil Market Report for the month of June, which expects the global oil demand to return to pre-pandemic levels by the end of 2022, also supported the rally in crude prices. IEA’s reiteration that OPEC+ needed to open the taps to keep the world oil markets adequately supplied also reflected on the likely demand-supply gap and supported firmer crude prices.
Meanwhile Goldman Sachs reiterated its projection of $80 for the Brent crude this summer as vaccine rollouts boost global economic activity and exacerbated the bullish sentiment for the commodity.
Crude Oil’s trajectory in the days to come would be influenced both by the demand indications on the current phase of travel led economic rebound and the likelihood of supply shocks if any from Iranian crude, should the now resumed Vienna talks lead to a lifting of sanctions against the Middle East nation.