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Oil up nearly 2% to multi-year highs on demand expectations

CommoditiesJun 15, 2021 05:01PM 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/File Photo

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices rose nearly 2% to their highest in more than two years on Tuesday, buoyed by expectations demand will recover rapidly in the second half of 2021.

Brent crude

U.S. oil rose $1.24, or 1.8%, to settle at $72.12 a barrel. It hit a session high of $72.19 a barrel, its highest since October 2018.

Boosting prices, the world's biggest oil traders said on Tuesday they see oil prices staying above $70 a barrel with demand expected to return to pre-pandemic levels in the second half of 2022.

Vitol Chief Executive Russell Hardy sees oil moving between $70 and $80 a barrel for the remainder of 2021 on the expectation that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) keep supply discipline, even as Iran's exports may resume if the United States rejoins a nuclear agreement with Tehran.

"We have had those stock draws for a couple months, the market is heading in the right direction," Hardy told the FT Commodities Global Summit.

Trafigura Chief Executive Jeremy Weir told the same event there was a good chance prices could reach $100 a barrel because of falling reserves before the world reaches peak oil demand.

OPEC+ producers have been gradually relaxing record output curbs in recent months.

"The decision by OPEC+ to be overly cautious in returning supply to the market, whether this is true caution or they are intentionally stoking oil prices higher, has been a main tenant in seeing $73 per barrel Brent," said Louise Dickson, oil markets analyst at Rystad Energy.

U.S. crude stocks fell by 8.5 million barrels in the week ended June 11, according to two market sources, citing American Petroleum Institute figures on Tuesday. Gasoline inventories rose by 2.85 million barrels and distillate stocks climbed by 1.96 million barrels, the data showed, according to the sources, who spoke on condition of anonymity. [API/S]

Official government data is due out Wednesday.

Analysts polled by Reuters expect U.S. crude stocks to have fallen for a fourth week in a row, dropping by about 3.3 million barrels last week. Industry data is due at 4:30 p.m. Tuesday, followed by official figures on Wednesday morning. [EIA/S]

Investors and traders are also watching the outcome of a two-day U.S. Federal Reserve meeting that starts on Tuesday for signals on when it will start to scale back monetary stimulus.

The Fed is getting ready to debate how and when to start tapering a massive asset-purchase program that helped to support the U.S. economy during the pandemic.

Oil up nearly 2% to multi-year highs on demand expectations
 

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Comments (10)
Notvery Goodathis
Peteymcletey Jun 15, 2021 6:02PM ET
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thanks joe
Steve Lora
Steve Lora Jun 15, 2021 3:10PM ET
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Bidens kickbacks for stealing election
carol ruszin
carol ruszin Jun 15, 2021 3:00PM ET
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Presidents don't control oil prices. Can't believe all the comments referring to the President. lol
Jon Bal
Jon Bal Jun 15, 2021 3:00PM ET
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the twitter school of economics
vince smith
vince smith Jun 15, 2021 3:00PM ET
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Of coarse the president can control oil prices, Biden 1) Canceled keystone pipeline 2) Stopped drilling in Alaska He can put pressure on OPEC countries to increase output. The petro dollar can be controlled through the exchange of the dollar and the dollar can be manipulated through bond buy backs.. There are plenty of ways the president can effect the price of oil.
Fahmi Yazit
Fahmi Yazit Jun 15, 2021 1:17PM ET
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Biden frigging fragile. Imbalance...price getting higher and higher while previous data shows otherwise. Not all countries recovered from pandemic and ppl getting worry price of food etc going up due to high oil price. Selfish Arab..curse you. Come on...lift Iran sanction and destroy Opec.
Sumit Gaikwad
Sumit Gaikwad Jun 15, 2021 10:01AM ET
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Same headline
Cornel Pod
Cornel Pod Jun 15, 2021 1:12AM ET
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Watch what they do and not so much what they say.
Yousuf Khan
Yousuf Khan Jun 15, 2021 1:06AM ET
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fake news
William Bailey
William Bailey Jun 14, 2021 11:32PM ET
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More untruth
perplexed76 .
perplexed76 . Jun 14, 2021 11:26PM ET
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KEKW
Vlad Lozovskiy
Vlad Lozovskiy Jun 14, 2021 11:17PM ET
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There you go. This is more real story. Falling falling falling articles not going to work.  biden is a failure.
 
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