Oil Hits $71 On Rising Demand Hopes In US, China

Oil prices were higher on Wednesday as negotiations over the Joint Comprehensive Plan of Action continued to falter, and as a rebound in oil demand in China, the United States and Europe threatened to outpace planned increases in supply.

The international crude oil benchmark, Brent, rose by $1.09 to trade at $71.34 per barrel as of 7:00 pm Nigerian time, while the US West Texas Intermediate gained $1.11 to trade at $68.38 per barrel.

S&P Global Platts reported that any resolution on the JCPOA remained far from certain as the fifth and final round of negotiations proceeded in Vienna, putting into question the prospect of increased Iranian oil hitting the market.

Iran’s Head Negotiator, Abbas Araghchi, was quoted as saying, “I am not personally confident that we reach a conclusion in this round of talks. The delegations may possibly need to return to their countries for more consultations,”

Mikhail Ulyanov, Russian envoy to the United Nations, had agreed with Araghchi, and added in a tweet that “the remaining outstanding issues are rather complicated and a very creative and responsible approach is needed to find solutions.”

Crude oil prices were also supported by a strong demand outlook for regions undergoing economic rebounds, including China, the US and Europe, Reuters reported.

“The oil market welcomed the Organization of the Petroleum Exporting Countries and its allies’ decision to stick with their existing production plan, and in conjunction with positive global demand indications, prices are gaining further today,” said Louise Dickson, Rystad Energy oil markets analyst.

Expecting a recovery in demand, OPEC+ agreed on Tuesday to maintain their plan to gradually ease supply curbs through July.

S&P Global Platts said that OPEC would convene June 24 and then hold an expanded meeting on July 1, with Russia and nine other partners in the OPEC+ supply accord to decide on production quotas for August and beyond.