(Bloomberg) — Oil edged higher in early Asian trading with the market focused 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 barrels from Iran should a nuclear deal be revived 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 Brent was 38 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.
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When OPEC+ meets on Tuesday, investors will also be looking for any clues on the next stage of the group’s supply policy amid growing expectations for demand to accelerate through the end of the year. As for July, all but four of 24 analysts and traders surveyed by Bloomberg predicted the alliance would ratify a planned increase of 840,000 barrels a day.
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