Oil traded just above $72 U.S. a barrel on growing signs that the global crude market is tightening.
West Texas Intermediate crude oil was at $72.02 a barrel in London trading while Brent crude oil for August settlements was at $74.25 U.S. Russia’s Sokol crude is trading at its strongest level since February 2020, while key swaps tied to the North Sea market that prices much of the world’s crude have rallied in recent days.
The latest move in oil prices comes after U.S. Federal Reserve Chairman Jerome Powell said the central bank would begin talks on tapering massive asset purchases, while penciling in two interest rate increases by the end of 2023.
A U.S. government report showed that domestic crude oil stockpiles are sinking as refinery demand picks up. Saudi Energy Minister Prince Abdulaziz bin Salman told a press conference that the cautious approach taken by the Organization of the Petroleum Exporting Countries, a group known as "OPEC+" to reviving oil supplies was paying off, indicating that he’s sticking to that position when the group next meets on July 1.
According to U.S. bank Citigroup, Brent crude oil could soon top $80 U.S. a barrel. Pent-up leisure demand, enabled by vaccine rollouts, will underpin global consumption this summer, the bank said in a note to its clients.
