Oil futures headed slightly higher on Thursday, with global benchmark Brent crude holding ground at its highest price since October 2018, as investors gauged signs of strengthening demand and kept an eye on any potential response to recent price rises by OPEC+.
Oil has been “holding up well in recognition that underlying energy demand continues to rebound as the economy continues to reopen,” Colin Cieszynski, chief market Strategist at SIA Wealth Management Inc., told MarketWatch. “Recent big U.S. weekly [crude supply] drawdowns continue to help provide support as well.”
Also, talk of the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, “steadily increasing production is a positive sign as long as supply increases continue to more or less match demand increases,” said Cieszynski. “If OPEC+ continues the same trend of monthly increases into August, the market may take it in stride.”
The OPEC+ group will officially meet on July 1 to review oil production levels.
West Texas Intermediate crude for August delivery CL00 CLQ21 was up 19 cents, or 0.3%, at $73.27 a barrel on the New York Mercantile Exchange after tacking on 0.3% on Wednesday.
The most active September Brent crude contract BRN00 BRNU21 added 20 cents, or 0.3%, at $74.70 a barrel on ICE Futures Europe. August Brent, the front-month contract, was up 22 cents, or 0.3%, at $75.41 a barrel, after closing Wednesday at the highest level for a front-month contract since October 2018.
Analysts said crude remains underpinned by data showing demand outpacing supply, including a weekly report on Wednesday from the Energy Information Administration said U.S. crude inventories fell by 7.6 million barrels for the week ended June 18. That marked the fifth consecutive decline reported by the EIA. It also pegged last week’s commercial crude oil stocks at a total of 459.1 million barrels, the lowest since the week ended March 6, 2020.
