Ahead of a high-stake meet of OPEC+ member states scheduled to take place on July 1, both US and UK crude oil futures had skyrocketed to the strongest since October 2018, as OPEC alongside its Russia-led allies have been expected to gradually ease output cut amid an ever-evolving geopolitical landscape with Iran nuclear deal appeared off the hook.
Aside from that, both oil contracts had secured their fifth straight weekly gains in a row as market remained sanguine over prospects of a solid economy recovery, in particular after German retail activities had spiked to the highest since the collapse of East Germany three decade earlier.
On top of that, a steep decline in US crude inventories had added to further bullish wing into the market participants’ morale amid a heightening up of demand in US refiners, which seemed to be banking heavily on a high-flying crude oil market, as US oil drilling rigs count rose for a tenth straight month in a row.
Besides, a growing uncertainty over restoration of 2015 Iran nuclear deal which in effect would have lifted the US sanctions on Iranian crude and refineries, bode well for crude traders as Iran had yet to respond to UN nuclear watchdog.
On top of that, a media headline that cited the possibilities of a cautious output hike of the OPEC+ nations from August this year, helped boost up investors’ sentiment further over a robust demand outlook.
Crude oil rallies as OPEC+ seeks cautious output hike from August
Citing statistics, on Friday’s commodity market wind-down, UK crude settled 0.8 per cent higher to $76.18 a barrel, while US WTI (West Texas Intermediate) futures’ prices gained more than 1.0 per cent to $74.05 a barrel.
On the week, both contracts had secured a weekly percentage gain of more than 3.0 per cent and docketed their highest closing level since October 2018 as beforementioned. Meanwhile, addressing to investors’ optimism that the OPEC+ nation would put a kibosh on the supplies, a senior market analyst at OANDA, Edward Moya said, “Crude prices rallied on an improving demand outlook and over expectations the market will remain tight as OPEC+ is likely to only deliver a small boost to output at the July 1st ministerial meeting. ”