Oil bulls pay attention to OPEC because US crude oil prices hit their best quarter in a year. Provider Investing.com

(Update settlement price, monthly and quarterly milestones)

Barani Krishnan

Investing.com-Oil bulls remain wary of OPEC because although producers plan to increase production and a variant of the virus is reported to cause a new coronavirus outbreak, U.S. crude oil will hit another year on Wednesday due to optimism about fuel demand The best quarter.

The benchmark price of US oil traded in New York was US$73.47 per barrel, up 49 cents or 0.7% on the day. Throughout June, WTI rose by 11, compared with a 24% increase this quarter.

This is the best performance of US crude oil in three months since its 92% rise in the second quarter of 2020, when it rose from the destruction of COV demand to the $20 level after minus $40.

The global benchmark price of oil traded in London was US$74.62 per barrel, an increase of 34 cents or 0.5% on the day. This month, Brent crude oil rose nearly 8%, and this quarter rose 17%.

John Kilduff, founding partner of the New York Energy Hedge Fund, said: “Although the delta variant of the virus is now raging, given that the COVID vaccination campaign across the Western world is better than expected, this has proven to be oil. One quarter.” The fund is capitalized again.

“There is also a lot of uncertainty about what agreement OPEC may reach in terms of production growth in the next few months, so I think cautious optimism is the argument here.”

OPEC, which is composed of 13 members of the Organization of Petroleum Exporting Countries led by Saudi Arabia, will meet with 10 oil production allies led by Russia on Thursday to consider increasing production after crude oil prices continue to rise for several months. Some analysts worry about this. May start to affect demand.

Some members of the expanded oil production alliance (or OPEC+) hope to substantially increase production in order to maximize revenue at current prices. Russia is one of them, reportedly seeking to increase production by 800,000 barrels.

Much will depend on whether Saudi Arabia’s Oil Minister Abdulaziz bin Salman will allow an increase that is sufficient to undermine the market’s upward momentum. This number is between 500,000 and 1 million barrels per day.

OPEC Secretary-General Mohamed Barkindo said on Tuesday that oil consumption in the second half of 2021 is expected to be 5 million barrels per day higher than in the first half.

He said that the oil inventories of developed countries in the OECD or the Economic Cooperation and Development Organization are now below the 2015-19 average.

Even so, he still urged to be cautious about OPEC+’s substantial increase in production. According to the production cut that began in April 2020 during the peak of the pandemic that disrupted demand, OPEC+ still holds about 5.8 million barrels of crude oil from the market every day.

In addition to OPEC’s production cuts, in the past month, as the traffic volume in U.S. cities has returned to pre-pandemic levels, and refineries have maximized the use of crude oil to produce gasoline to meet expected fuel demand, oil prices, especially WTI oil prices, have been affected. Supported by strong inventory decline.

Data released by the US Energy Information Administration on Wednesday again showed that inventories fell by as much as 6.7 million barrels last week, compared to expectations for a decline of 4.7 million barrels.

The capacity utilization rate of US refineries last week was 92.9%, which was the highest level in the summer of 2019, well before the pandemic began last year.

Last week there was an increase of 1.52 million barrels, while the forecast is for a decrease of 886,000 barrels, which indicates an increase in refining activities.

Including diesel, a decrease of 869,000 barrels is expected, while an increase of 486,000 barrels is expected.

In addition to domestic consumption, US crude oil exports last week also increased from an average of 3.65 million barrels per day in the previous week to 3.72 million barrels per day.

At the same time, US crude oil production remained stagnant at 11.2 million barrels per day.