Oil Down, but Near 2018 Highs as Investors Await OPEC+ Meeting

© Reuters.

By Gina Lee

AiVIF.com – Oil was down Monday morning in Asia after climbing to levels last seen in October 2018. Negotiations between the U.S. and Iran on reviving a nuclear deal are set to continue, while the Organization of the Petroleum Exporting Countries and allies (OPEC+) will meet later in the week.

Brent oil futures were down 0.23% to $75.21 by 11:45 PM ET (3:45 AM GMT), rolling over to the Sep. 21 contract on Jun. 27, 2021, to the Sep 21 contract. WTI futures inched down 0.08% to $73.99.

OPEC+ will discuss supplies for August 2021 when it meets on Jul. 1, and could further ease current supply curbs as the fuel demand outlook continues to improve.

"We expect OPEC+ will try to balance the market's need for more supply against the fragile nature of the recovery in demand, at next week's meeting," with jet fuel demand recovery capped as international borders remain closed, ANZ analysts said.

They also expect the cartel to increase output by about 500,000 bpd in August, which will likely support higher prices.

The black liquid ended the previous week with its fifth week of gains as economic recoveries continue in key markets such as the U.S. and China, the world’s top oil exporter and importer respectively. OPEC+ has also maintained supply discipline on the supply side and will return 2.1 million barrels per day to the global supply from May through July 2021.

However, investors are also keeping an eye on the spread of the Delta variant of the COVID-19 virus in other countries such as Australia.

Meanwhile, negotiations between Iran and the U.S. to revive the 2015 nuclear deal are expected to resume in the coming days after a monitoring agreement between the two sides expired during the previous week. The deal, if revived, would see Iranian exports added to the global supply.