LONDON: Oil prices rose on Wednesday, heading for monthly and quarterly gains, after industry data suggested U.S. crude stockpiles were shrinking while an OPEC report foresaw an undersupplied market this year, but a possible glut next year.
The Brent crude contract for August, due to expire on Wednesday, was up 83 cents, or 1.1per cent at US$75.59 a barrel by 1224 GMT. The September contract was up 99 cents at US$75.27 a barrel. U.S. crude was up US$1.10, or 1.5per cent at US$74.08 a barrel.
Both Brent and WTIs are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months.
A Reuters poll showed that Brent was seen averaging US$67.48 a barrel this year and WTI US$64.54, both up from May’s poll.
Crude stocks in the United States were down by 8.2 million barrels, American Petroleum Institute data showed, according to two sources who spoke on condition of anonymity. Government data is due later on Wednesday.
Hopes for a broad recovery received a boost from Mohammad Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), who said on Tuesday that demand is expected to rise by 6 million barrels per day (bpd) in 2021, with 5 million bpd of that coming in the second half of the year.
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Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a 5 million bpd supply shortfall.
However, an internal OPEC report seen by Reuters highlights that the oil market could return to a glut after the group is expected to unravel oil production cuts of under 6 million barrels per day by April 2022.
OPEC+ is expected to discuss a potential extension of its current oil supply deal beyond April 2022 when it meets on Thursday, two sources told Reuters.
(Additional reporting by Aaron Sheldrick; editing by John Stonestreet and Louise Heavens)
