Brent Reaches $70, Highest Since March

Jessica Jaganathan
Tuesday, June 1, 2021

Oil prices rose on Tuesday, with Brent topping $70 and trading at its highest since March, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world's top oil consumer.

Prices were also boosted after data from China showed that factory activity expanded at its fastest this year in May.

Brent crude futures for August gained 94 cents, or 1.4%, to $70.26 a barrel by 0610 GMT. U.S. West Texas Intermediate crude for July was at $67.66 a barrel, up $1.34, or 2% from Friday's close, with no settlement price for Monday due to a U.S. public holiday.

Brent earlier hit a session peak of $70.34, the highest intraday price since March 8.

"While there are concerns over tighter COVID-19 related restrictions across parts of Asia, the market appears to be more focused on the positive demand story from the U.S. and parts of Europe," analysts from ING Economics said in a note on Tuesday.

"In the U.S., the summer driving season officially got underway following the Memorial Day weekend, and we have entered this period with gasoline inventories already trending lower, and not too far from a 5-year low for this time of the year."

Tracking firm GasBuddy said Sunday's U.S. gasoline demand jumped 9.6% above the average of the previous four Sundays, the highest Sunday demand since the summer of 2019.

The price gains were capped, though, as more output is expected to hit the market.

The Organization of the Petroleum Exporting Countries and its allies - known as OPEC+ - are likely to agree to continue to slowly ease supply curbs at a meeting on Tuesday, OPEC sources said, as producers balance an expected recovery in demand against a possible increase in Iranian output.

OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, as it anticipated global demand would rise despite surging coronavirus cases in India, the world's third-largest oil consumer.

"We believe that the market will be able to absorb this additional supply, and so would expect the group to confirm that they will increase output as planned over the next 2 months," ING Economics analysts added. 

(Reporting by Jessica Jaganathan; Editing by Muralikumar Anantharaman and Tom Hogue)

Categories: Energy Activity Production Oil Price

Related Stories

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Petronas-Eni Upstream Joint Venture to Take Up to Two Years to Set Up

French Oil Major Acquires Interests in Multiple Blocks in Southeast Asia

Fugro Expands Geotechnical Testing Capabilities in Indonesia

Pakistan’s OGDC to Start Production at ADNOC’s Offshore Block by 2027

Petrovietnam, Petronas Extend PSC for Offshore Block

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

Valeura Wraps Up Infill Drilling Campaign in Gulf of Thailand

Current News

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com