Oil prices climbed in early Asian trade on Monday, underpinned by the bright outlook for fuel demand growth in the next quarter, while investors looked ahead to the OPEC+ meeting this week for supply guidance.
Brent crude futures for August nudged up 7 cents, or 0.1 per cent, to $68.79 a barrel after settling at their highest in two years on Friday while the U.S. West Texas Intermediate crude for July was at $66.45 a barrel, up 13 cents, or 0.2 per cent.
Both contracts are on track for a second monthly gain as analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports.
Iran has been in talks with world powers since April working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact.
“We see demand outstripping supply in the order of 650,000 barrels per day and 950,000 bpd in Q3 and Q4 respectively,” ANZ analysts said, adding that this includes 500,000 bpd of increase in Iranian output.
The Organization of Petroleum Exporting Countries. OPEC, and their allies including Russia will meet on Tuesday.
The group known as OPEC+ is expected to stay the course on its plans to gradually ease supply cuts until July.
Separately, crude output in the United States soared 14.3 per cent in March, the Energy Information Administration, reported on Friday, while Baker Hughes data showed oil and gas rigs rising for a 10th month in a row last week.