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Oil settles up after hitting 15-month highs on demand prospects

CommoditiesJun 01, 2021 03:50PM ET
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© Reuters. FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base

By Laura Sanicola

NEW YORK (Reuters) -Oil prices settled higher on Tuesday, with Brent hitting above $71 and trading at its highest since March, on expectations for growing fuel demand during the summer driving season in the United States as OPEC+ agreed to boost output.

Brent crude futures for August settled up 93 cents, or 1.3%, to $70.25 a barrel after hitting $71 earlier in the session - its highest intra-day price since March 8.

U.S. West Texas Intermediate crude for July was up $1.40, or 2.1%, to $67.72.

Tracking service GasBuddy said Sunday's U.S. gasoline demand, coinciding with the Memorial Day weekend, jumped 9.6% above the average of the previous four Sundays. That was the highest Sunday demand since the summer of 2019.

U.S. crude stockpiles were expected to fall by 2.1 million barrels last week, according to a preliminary Reuters poll.

Prices were also boosted by Chinese data showing that the country's factory activity grew at its fastest pace this year in May.

The gains were capped, though, by expectations that more output will hit the market.

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, also agreed to continue a slow easing of supply curbs in their meeting on Tuesday, an OPEC source said, as producers balance an expected demand recovery against a possible increase in Iranian output.

"The deal with Iran is very much in flux about whether or not it will get done, which is making the market tense," said John Kilduff, partner at Again Capital LLC in New York.

OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, anticipating rising global demand despite the high number of coronavirus cases in India, the world's third-largest oil consumer.

"Unless widespread cheating develops or a renewed uptick in global coronavirus cases evolves, OPEC’s current recipe for success would appear to represent a viable plan," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Oil settles up after hitting 15-month highs on demand prospects
 

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Comments (6)
Alan Rice
Alan Rice Jun 01, 2021 11:27AM ET
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Brent Target:$105/bbl/2023.
perplexed76 .
perplexed76 . Jun 01, 2021 10:46AM ET
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oil gamblers will soon repeat crypto ones move
Vlad Lozovskiy
Vlad Lozovskiy Jun 01, 2021 9:43AM ET
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Hey Biden.   Let's shut down few more of our oil pipelines!  And let's open few Russian!
Fahmi Yazit
Fahmi Yazit Jun 01, 2021 1:05AM ET
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When there are still other countries are struggling to recover..the higher price not helping ppl at all. Stupid opec..just stupid. Think about their pocket money only..the rest are just like a puppet for them. Stupid arab..
Chris Lamborghini
Chris Lamborghini May 31, 2021 11:20PM ET
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before august Brent may hit $80
Michael Dell
Michael Dell May 31, 2021 10:02PM ET
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Surplus of printed dollars bidding up prices
MS MS
MS MS May 31, 2021 10:02PM ET
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Thats not how it works. Oil has always been a constraint based market, and in these markets collusion precails! Look at rhe price of diamonds...
Saad Rizwan
Saad Rizwan May 31, 2021 10:02PM ET
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MS MS dollar weakness pumps oil prices. Pretty well understood comcept
 
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