Oil Tops $70 a Barrel for First Time Since 2019
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Oil resumed its advance, reaching the highest settlement in more than two years with the OPEC+ alliance forecasting a tightening global crude market and a nuclear deal with Iran still up in the air.
West Texas Intermediate crude rose 2.1%, while global benchmark Brent settled above $70 a barrel for the first time since 2019. Prices rallied as members of the OPEC+ alliance sounded upbeat notes about the global consumption rebound. Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said “the demand picture has shown clear signs of improvement,” while his Russian counterpart also spoke of the “gradual economic recovery.”
Adding further support, the prospect of an immediate resolution in talks to revive the 2015 nuclear accord has been delayed for now. Iranian officials said the Persian Gulf country and world powers are unlikely to reach a final agreement in the current round of talks, cooling speculation that sanctions on Tehran’s key oil exports might soon be lifted.
“People are looking more and more at a big travel season in the Northern Hemisphere, at least in Europe and the U.S.,” said Michael Lynch, president of Strategic Energy & Economic Research. “So the demand side looks good,” and with OPEC+ only gradually returning output and an Iran deal looking further off, “it looks like we could be in for a tight summer.”
A robust economic recovery in the U.S. and Europe has given the Organization of Petroleum Exporting Countries and its allies the confidence that markets can absorb additional barrels, with the producer group agreeing June 1 to press ahead with an increase of 841,000 barrels a day in July, following hikes in May and June. That comes as the International Energy Agency signaled a speedier demand recovery than its previous estimates, seeing global oil demand in one year possibly rebounding to levels seen before the pandemic.
WTI for July delivery climbed $1.40 to settle at $67.72 a barrel. There was no settlement May 31 due to Memorial Day.
Brent for August settlement rose 93 cents to $70.25 a barrel, the highest since May 2019.
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