Oil Edges Higher With Market Set to Focus on OPEC+ Policy Meet

© Reuters.

(Bloomberg) — Oil climbed at the open of trading in Asia with the market expected to focus on an OPEC+ supply policy meeting early this week and any commentary around the prospect for returning Iranian supply.

Futures in New York rose toward $67 a barrel after falling 0.8% on Friday. OPEC and its allies are expected to stick with a decision to boost output in July when the group gathers Tuesday, according to a Bloomberg survey last week. While rebounding demand is driving prices higher, the possibility of more supply from Iran following a revived nuclear deal is clouding the outlook.

Iran and world powers have resumed discussions, Russia’s envoy to the United Nations in Vienna said in a tweet, adding that there was an understanding among the countries involved that “the current round should be final.”

Oil is poised for a second straight monthly gain as the U.S., China and parts of Europe lead a robust demand recovery from the Covid-19 pandemic, despite a virus comeback across Asia. American gasoline stockpiles have declined and consumption gained in the lead up to the Memorial Day weekend, which heralds the start of the summer driving season and peak fuel demand.

The prompt timespread for was 39 cents a barrel in backwardation — a bullish market structure where near-dated contracts are more expensive than later-dated ones. That compares with 9 cents a week earlier.

All but four of 24 analysts and traders surveyed by Bloomberg predicted that OPEC+ will ratify an increase of 840,000 barrels a day for July, completing a three-part process to revive just over 2 million barrels this summer.

©2021 Bloomberg L.P.

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