oil price: Brent heads for $70 on pink US data, oil demand outlook

SINGAPORE: Oil prices rose on Friday, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, as concerns eased over the impact of any comeback Iranian supplies.

Brent crude futures for July gained 16 cents, 0.2%, to $69.62 a barrel at 0050 GMT while U.S. West Texas Intermediate crude for July was at $67.17 a barrel, in up 32 cents, or 0.5%.

“Oil rose on strong US economic data and growing sentiment that if the Iran nuclear deal is revived, it will not include an immediate lifting of sanctions and the oil market will not quickly be flooded with excess supplies,” said OANDA analyst Edward Moya. in a note.

Brent and WTI are both on track to post weekly gains of 5% to 6% as analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter during summer trips to Europe and the United States following the spread of COVID-19 vaccination programs.

Strong economic data from the United States, the world’s largest economy and oil consumer, also boosted risk appetite. The number of Americans filing new claims for unemployment benefits fell to the lowest since mid-March 2020, beating estimates.

Balancing expectations of a recovery in demand against a possible increase in Iranian supply, the Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC +, are expected to stick to the current pace of gradually easing oil supply curbs at a meeting on Tuesday, OPEC sources said.

Iran and world powers have been negotiating in Vienna since April to work out what steps Tehran and Washington must take on nuclear sanctions and activities to return to full compliance with Iran’s 2015 nuclear pact with the world powers.

Analysts expect Iran to add between 500,000 bpd and 1.5 million bpd of crude and condensate to the market once sanctions are lifted.

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Felix J. Dixon