Brent crude oil futures hit a two-year high, while West Texas Intermediate crude oil rose to a level not seen in nearly three years.
Due to signs of strong fuel demand in some economies, oil prices continued to climb on Wednesday, and the possibility of Iranian oil returning to the global market after the US Secretary of State said it is unlikely to lift sanctions on Tehran.
At 13:38 GMT, the global benchmark Brent crude oil futures rose 44 cents, or 0.6%, to US$72.66 per barrel, and earlier reached US$72.83, the highest level since May 2019.
US benchmark West Texas Intermediate (WTI) crude oil futures rose 30 cents, or 0.4%, to $70.35 per barrel. Earlier, they touched $70.62, the highest level since October 2018.
“Years of rising oil prices reflect the improvement in oil demand sentiment. At the same time, crude oil and product inventories are expected to decrease significantly in the second half of 2021, becoming the new normal for oil consumption after the epidemic. Rystad Energy’s oil market analyst Louise Dickson on Wednesday Said in a report.
With the removal of COVID-19 restrictions and an increase in vaccination campaigns, American drivers are on the road again-stimulating demand for crude oil.
“In the United States, the demand for gasoline and diesel is increasing before the summer driving season. This year’s momentum has been given an additional boost because it coincides with the successful vaccination campaign, which opened up the economy and oil demand began to grow even higher. ,” Dixon added.
On Tuesday, the U.S. Energy Information Administration (EIA) predicted that the United States, the world’s largest oil consumer, will increase fuel consumption by 1.49 million barrels per day (bpd) this year, higher than the previous forecast of 1.39 million barrels per day.
Another bullish sign is that industry data showed a decline in US crude oil inventories last week.
As Tehran and the United States are negotiating to restore the Iran nuclear agreement, oil investors have always assumed that sanctions on Iran’s exports will be lifted this year, oil supply will increase, and price increases will be restricted. Action (JCPOA) to make progress.
But on Tuesday, U.S. Secretary of State Anthony Brinken told the U.S. Senate Committee: “I expect that even if compliance with the JCPOA is restored, hundreds of sanctions will continue to exist, including [President Donald] Trump administration. If they are not inconsistent with the JCPOA, they will exist until Iran’s behavior changes. “
The Organization of Petroleum Exporting Countries and its allies, an organization called OPEC+, have not yet indicated whether they will insist on supply restrictions after July.
OPEC Secretary-General Mohamed Barkindo recently stated that OPEC+ expects further inventory declines in the coming months.