Oil exceeds $ 70 as the US summer driving season kicks off Business and Economy News


Despite COVID-related restrictions in some areas of Asia, the market is fortified by demand from the US and parts of Europe.

Oil prices rose on Tuesday, with Brent hovering above $ 70, as optimism grew over the prospects for fuel demand during the summer driving season in the United States, the world’s largest consumer of oil.

Prices also rose after data from China showed factory activity expanded to its highest this year in May.

Gross futures on August crude gained 83 cents, or 1.2 percent, to $ 70.15 a barrel at 2:23 GMT. West Texas Intermediate Crude in July stood at $ 67.61 a barrel, up $ 1.29, or nearly 2 percent from Friday’s close, with no liquidation price for Monday due of a U.S. holiday.

“While there are concerns about tighter restrictions on COVID-19 in some parts of Asia, the market appears to be more focused on the history of positive demand from the US and parts of Europe,” he said. Tuesday analysts at ING Economics in a note. “In the U.S., the summer driving season officially began after Memorial Day weekend, and we’ve entered that period with gas inventories already tending downward, and not far from the five-year lows for at this time of year “.

Monitoring firm GasBuddy said U.S. gasoline demand on Sunday jumped 9.6 percent above the average for the previous four Sundays, the highest Sunday demand since the summer of 2019.

Price gains were limited, however, as higher production is expected to hit the market.

The Organization of the Petroleum Exporting Countries and its allies (OPEC +) is likely to agree to continue to slowly ease the slowdown in supply at a meeting on Tuesday, OPEC sources said. producers balance the expected recovery in demand against a possible increase in Iranian production.

OPEC + decided in April to return to the market 2.1 million barrels per day of supply from May to July, as it predicted that global demand would increase despite the increase in coronavirus cases in India, the third largest consumer of oil in the world.

“We believe the market will be able to absorb this additional supply and therefore we would expect the group to confirm that it will increase production as planned over the next 2 months,” ING Economics analysts added.

Market fundamentals are strong and oil prices could rise to $ 80 a barrel by mid-third in the absence of Iranian supplies, Fereidun Fesharaki, president of industrial consultancy FGE, told Bloomberg Television.

Iran’s resurgence “will take place in an orderly and transparent manner,” without disturbing the stability that other OPEC + nations have worked to achieve, OPEC Secretary-General Mohammad Barkindo said in a statement. Monday’s meeting. However, Iranian Oil Minister Bijan Namdar Zanganeh told reporters in Tehran that the nation could quickly recover oil production.

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