Crude oil prices surged on Wednesday with the Brent crude trading above the $71 per barrel after OPEC projected demand improvement and tightening of the market.
West Texas Intermediate (WTI) crude also continued its onward march after reaching its highest level since October 2018.
In a statement, after the meeting OPEC+ meeting, the cartel in a statement said: “The meeting noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling as the economic recovery continued in most parts of the world as vaccination programmes accelerated.”
Currently, the July contract of WTI on NYMEX is trading at $68.34 per barrel, higher by 0.92 per cent from its previous close.
The August contract of Brent crude on the Intercontinental Exchange is trading at $71.07, higher by 1.17 per cent.
Tapan Patel, Senior Analyst (Commodities) at HDFC securities said: “Crude oil prices traded higher on higher demand outlook from OPEC following strong US data.”
He noted that the strong US manufacturing data improved demand outlook eyeing economic growth.
“The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, agreed on Tuesday to keep to their plan to gradually ease supply curbs through July,” Patel added.