(Bloomberg) — Oil is heading for a fifth weekly advance, the longest winning streak since December, as stockpiles shrink and the market tightens ahead of an OPEC+ meeting that will consider pumping more crude.
Front-month futures in New York are up more than 2% this week, while global benchmark Brent is at the highest level since October 2018. The alliance, led by Saudi Arabia and Russia, are set to meet July 1 and the group is widely expected to revive more output in August, according to a Bloomberg survey. Delegates from the coalition say discussions are already underway.
The rebound in fuel consumption in key regions including the U.S. and Europe is rapidly draining stockpiles, with some flagging the possibility of benchmark Brent crude hitting $100 a barrel again. The prospect of an imminent surge of Iranian oil is also diminishing as talks to revive a nuclear deal drag on.
“The demand recovery has been swift and there is pressure on OPEC+ to release more barrels, otherwise we might see $80 a barrel by next month,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore.
The prompt timespread for Brent was 78 cents in backwardation — where near-dated contracts are more expensive than later-dated ones. The bullish structure has eased from 85 cents at the start of the week.
See also: India Again Urges OPEC+ to Boost Oil Supply Amid Price Concern
Russia is considering making a proposal that OPEC+ boost output and delegates say a hike is being informally discussed. The average gain forecast by analysts was for about 550,000 barrels a day — barely a quarter of the global supply deficit that the alliance anticipates during August.
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