Oil hits $71 on rising demand hopes in US, China
Oil prices were higher on Wednesday as negotiations over the Joint Comprehensive Plan of Action continued to falter, and as a rebound in oil demand in China, the United States and Europe threatened to outpace planned increases in supply.
The international crude oil benchmark, Brent, rose by $1.09 to trade at $71.34 per barrel as of 7pm Nigerian time, while the US West Texas Intermediate gained $1.11 to trade at $68.38 per barrel.
S&P Global Platts reported that any resolution on the JCPOA remained far from certain as the fifth and final round of negotiations proceeded in Vienna, putting into question the prospect of increased Iranian oil hitting the market.
Crude oil prices were also supported by a strong demand outlook for regions undergoing economic rebounds, including China, the US and Europe, it was reported.
“The oil market welcomed the Organization of the Petroleum Exporting Countries and its allies’ decision to stick with their existing production plan, and in conjunction with positive global demand indications, prices are gaining further today”, said Louise Dickson, Rystad Energy oil market analyst.
Expecting a recovery in demand, OPEC+ agreed on Tuesday to maintain their plan to gradually ease supply curbs through July.
S&P Global Platts said the OPEC would convene June 24 and then hold an expanded meeting on July 1, with Russia and nine other partners in the OPEC+ supply accord to decide on production quotas for August and beyond.
