By Adedapo Adesanya
Oil prices continued to climb to their highest in almost three years on Friday, pushing the global crude benchmark, Brent, and the United States’ crude benchmark, West Texas Intermediate, to their fifth week of gains in a row on expectations that demand growth will surpass supply.
The Brent crude was sold at $76.18 per barrel after it rose by 62 cents or 0.82 per cent, while the WTI crude traded at $75.05 per barrel after it went up by 75 cents or 1.02 per cent.
Oil prices have received supports from different directions in recent weeks, benefiting from the ongoing decline in global oil inventories as oil demand continues to grow higher.
It is also strengthening expectations the market will remain tight as the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will be cautious in returning more crude to the market from August onwards.
The alliance is due to meet on July 1 to discuss the further easing of their output cuts from August and the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, according to analysts, who said this was countered by rising COVID-19 cases and outbreaks in other places.
This is coming as the prospect of sanctions on Iran being lifted and more of its oil hitting the market anytime soon has reduced.
US Secretary of State Antony Blinken also said on Friday that serious differences remained, but that he hoped an upcoming round of indirect talks would bridge them.
Iran has not responded to the United Nations on extending a monitoring agreement that expired overnight after the US warned that not prolonging it would harm efforts to revive the 2015 Iran nuclear deal.
If an Iran agreement is not reached by July 1, analysts anticipate OPEC+ will return to a month-by-month quota setting and announce a modest production increase for August at its meetings next week.
Meanwhile, the number of US oil rigs, an early indicator of future output, fell by one to 372 this week, according to energy services firm Baker Hughes Co.
Despite that small decline, the rig count gained 13 in June – its 10th monthly rise – and increased 48 in the second quarter, its third consecutive quarterly rise.
