Crude oil prices rose sharply on Monday and lifted the most active WTI Crude futures contracts to their highest finish in over 2-1/2 years, amid rising optimism about energy demand and easing worries about excess supply.
Thanks to reopening of the economies in the U.S. and relaxation of restrictions in several countries in Europe and in some other parts of the world, the outlook for energy demand has turned positive.
Worries about possible excess supply in the oil market eased after the latest talks between world powers and Iran to revive a nuclear deal ended without an agreement.
The dollar’s weakness against other major currencies contributed as well to the rise in oil prices. The dollar index dropped by over 0.4% to 91.83 today.
West Texas Intermediate Crude oil futures for July ended up by $2.02 or about 2.8% at $73.66 a barrel.
Brent crude futures for August gained about $1.25, or 1.7% to $74.75 a barrel.
Iran and six world power negotiators postponed talks on Sunday to revive the 2015 nuclear deal and it was unclear when formal negotiations would resume.
The pause in the talks came after Ebrahim Raisi, a hardliner and fierce critic of the West, won Iran’s presidential election on Friday.
Meanwhile, Iraq, OPEC’s second-biggest producer, expects oil prices to reach $80 per barrel as the energy market stabilizes.
“We are optimistic about the rise in prices, but we are counting on its stability,” expecting that “prices will exceed $70 and reach $80 per barrel”, Aseem Jihad, a spokesman for the oil ministry told Iraqi News Agency.