WTI buyers restore confidence ahead of the OPEC+ meeting on July 1.
The US-Iran standoff is putting a hold on a boom in Iranian oil shipments.
Fuel demand rises as economic optimism grows.
The optimistic undertone in US oil continues intact amid good fundamental news, as WTI (futures on Nymex) is back on the $74 mark, reapproaching the level last touched in October 2018 at $74.45.
The risk of the restoration of Iranian oil supply to the market has been delayed as the US and Iran battle to resuscitate the nuclear deal talks, which is beneficial for the black gold.
Furthermore, the positive outlook for oil is bolstered by better chances for a resurgence in gasoline consumption as the global economy improves. WTI began the week on a positive note, having risen for the sixth week in a row last week.
Oil is being pushed higher by renewed US dollar weakening amid doubt over the Fed’s tightening plans in light of weaker-than-expected PCE inflation data. For foreign customers, a weaker greenback lowers the price of USD-denominated oil.
However, it is unclear whether the WTI price can maintain its multi-year highs, as investors may become cautious ahead of the OPEC and its allies (OPEC+) meeting on July 1. The partnership is projected to expand oil production as early as August, as oil prices are rising and demand forecasts are improving.
For new trade impetus, all eyes are now on the US weekly crude supply data, which are coming later on Tuesday and Wednesday. The talks regarding US Vice President Joe Biden’s $1.2 trillion infrastructure stimulus package will also be widely watched.
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