Brent hits $70 as demand is expected to rise
Oil prices rose on Tuesday and Brent surpassed $70 as optimism over the outlook for fuel demand for the summer travel season in the United States, the world's largest oil consumer, rose.
The data from China showing that it increased at the fastest rate in May this year was also effective in the increase in prices.
Brent crude futures for August rose 86 cents, or 1.2%, to $70.18 a barrel as of 0504 GMT. West Texas Intermediate (WTI) crude was $67.61 a barrel for July, up $1.29, or about 2%, from Friday's close. There was no settlement price on Monday due to a US public holiday.
While there are concerns about tighter COVID-19 related restrictions in parts of Asia, the market seems more focused on positive demand expectations from the US and parts of Europe.
Summer driving season in the US officially kicked off after Memorial Day weekend. Gasoline inventories which are said to be already on a downward trend during this period, on a trend not far from 5-year low for this time of year.
US gasoline demand on Sunday was 9.6% above the average of the previous four Sundays and it was the highest market demand since summer 2019.
However, price increases were limited as more supplies were expected to hit the market.
OPEC sources said the Organization of the Petroleum Exporting Countries and its allies will continue to gradually ease supply restrictions at Tuesday's meeting, as producers will balance the expected recovery in demand against a possible increase in Iran.
In April, OPEC+ decided to increase supply to the market by 2.1 million barrels per day from May to July, as it predicts global demand will rise despite rising coronavirus cases in India, the world's third-largest oil consumer.
It is believed that the market can handle this additional supply and therefore the group is expected to increase production as planned over the next 2 months.
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