Oil prices climb nearly 3% on demand hopes
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The news: Oil prices climbed to their highest since May-end, buoyed by hopes of rising fuel demand during the northern hemisphere summer despite a stronger US dollar and expectations of higher for longer interest rates.
The numbers: Brent crude futures rose 2.5% to USD81.63 ($123.5) a barrel, marking their highest close since 30 May. US West Texas Intermediate (WTI) crude futures rose 2.9% to USD77.74 a barrel.
The context: Analysts said crude futures were higher on expectations of summer demand being supportive of prices. Goldman Sachs analysts said they expect Brent to rise to USD86 a barrel in the third quarter, noting in a report that solid summer transport demand will push the oil market into a third-quarter deficit of 1.3 million barrels per day (bpd).
Earlier this month, the Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, agreed to extend most of its production cuts into 2025.
The rise in prices comes despite the expectation for the Federal Reserve to leave interest rates higher for longer and the US dollar rising to a four-week high due to political uncertainty in Europe, both factors that weigh on economic growth and reduce demand for oil.
The source: Reuters
