Oil Climbs While OPEC+ Considers Output Increase

Analysts expect oil demand to gather pace in the second half of the year as more people are vaccinated against COVID-19 and travel restrictions are eased.

Oil rose almost $2 on Thursday, supported by the prospect of strengthening demand, lower U.S. stocks and a Reuters report that OPEC+ producers could increase output in the coming months. Brent crude gained $1.86, or 2.5 per cent, to $76.48 a barrel by 1212 GMT. U.S. West Texas Intermediate crude was up $2.37, or 3.2 per cent, at $75.84. At its meeting today OPEC+ is moving towards adding about 2 million barrels per day (bpd) of oil to the market between August and December, an OPEC+ source told Reuters. The source said that monthly output increases by the group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia would amount to less than 0.5 million bpd. "The consensus was looking for 500,000 bpd or slightly more. So 400,000 bpd additions would be below expectations for August and would keep the market tight this summer, with still rising demand over the coming weeks," said UBS analyst Giovanni Staunovo.