Oil extended gains after closing at the highest since October 2018 as OPEC+ provided an upbeat assessment of the demand outlook and the prospect of a speedy return of Iranian barrels to the market waned.
Futures in New York rose 0.6%, while Brent climbed 0.7% after settling above $70 a barrel on Tuesday for the first time since 2019. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said demand “has shown clear signs of improvement” as the alliance ratified an output boost for July. His Russian counterpart also spoke of the “gradual economic recovery.”
Adding further support to the market was an indication that talks to revive a 2015 nuclear accord with Iran has been delayed for now. An Iranian official said a deal is now expected to be finalized in August.
Oil is up 40% this year as the recovery from the pandemic in the U.S., China and parts of Europe boosts the outlook for fuel consumption, despite a Covid-19 resurgence in countries such as India. Global demand may rebound to levels seen before the outbreak in a year, according to the International Energy Agency, signaling a quicker comeback than its previous estimates.