Oil extends gains on OPEC+ supply discipline and demand prospects

Commodities

By Administrator_ India

Capital Sands

Oil rose on Wednesday, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States.

Brent rose 48 cents, or 0.7%, to $70.73 a barrel at 0856 GMT. U.S. West Texas Intermediate WTI crude rose 38 cents, or 0.6%, to $68.10.

Expecting a recovery in demand, the OPEC and its allies, together known as OPEC+, agreed on Tuesday to keep to their plan for a gradual easing of supply curbs through July.

Saudi Energy Minister Prince Abdulaziz bin Salman said there has been solid demand recovery in the United States and China and he believes that the pace of COVID-19 vaccine rollouts can only lead to a further rebalancing of the global oil market.

Analysts also say that the slow progress of Iran’s nuclear talks provides breathing room for demand to catch up before Iranian oil returns to the market.

Two Western diplomats and an Iranian official said the talks are likely to pause on Thursday, but it was unclear if they would resume before Iran’s June 18 presidential election.

Investors will also be on the lookout for weekly inventory data from the American Petroleum Institute, due later on Wednesday, and from the U.S. Energy Information Administration on Thursday.

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