Brent rises above $75 a barrel on strong demand outlook

PUBLISHED: Tue, 22 Jun 2021 16:22:48 GMT
Ahmad Ghaddar
Reuters
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Key Points
  • Brent hits $75/barrel for first time since April 2019
  • Expectation of recovery in global demand supports rally
  • OPEC+ discussing further gradual production hike

LONDON, June 22 (Reuters) – Crude oil prices retreated on Tuesday, after Brent rose above $75 a barrel for the first time since April 2019 and as OPEC+ begins discussions on raising oil production, but a strong demand outlook underpinned prices.

Brent crude futures fell 45 cents, or 0.6%, to $74.45 a barrel by 1200 GMT, after hitting a session high of $75.30 a barrel, the strongest since April 25, 2019.

U.S. West Texas Intermediate (WTI) crude was at $73.15 a barrel, down 51 cents, 0.7%.

OPEC+ is discussing a gradual increase of oil output from August, but no decision has been taken on the exact volume yet, an OPEC+ source said on Tuesday.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is already returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record output curbs, as demand recovers from the pandemic.

The group meets next on July 1.

Both benchmarks have risen for the last four weeks in response to the rollout of global COVID-19 vaccinations and an expected pick-up in summer travel.

” of tight physical markets and healthy demand perceptions, the risk remains skewed to the upside,” oil brokerage PVM said.

BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.

BP CEO Bernard Looney told Reuters on Tuesday there was “a very strong possibility” that these price levels would be sustained over the coming years, adding “and if they do, it’s very good for our strategy.”

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