Oil edged up in Asia after closing at the highest level since October 2018 as OPEC+ provided an upbeat assessment of the demand outlook and the prospect of a speedy return of Iranian barrels to the market waned.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said demand “has shown clear signs of improvement” as the alliance ratified an output increase for July. His Russian counterpart also spoke of the “gradual economic recovery,” with the comments driving West Texas Intermediate up by 2.1% and pushing Brent above $70 a barrel at the close for the first time since 2019.
Adding further support to the market was an indication that talks to revive a 2015 nuclear accord with Iran has been delayed for now. An Iranian official said a deal is now expected to be finalized in August.
Oil is up around 40% this year as the recovery from the pandemic in the U.S., China and parts of Europe boost the outlook for fuel consumption, despite a Covid-19 resurgence in parts of Asia. Global demand may rebound to levels seen before the outbreak in a year, according to the International Energy Agency, signaling a quicker comeback than its previous estimates.
The prompt timespread for Brent was 40 cents in backwardation — a bullish market structure where near-dated prices are more expensive than later-dated ones — on Tuesday. That compares with 9 cents at the start of last week.