Crude oil prices retreated on Tuesday, after Brent rose above $75 a barrel for the first time since April 2019 and as OPEC+ begins discussions on raising oil production, but a strong demand outlook underpinned prices.
Brent crude futures fell $0.53, or 0.7%, to $74.37 a barrel by 0939 GMT, after hitting a session high of $75.30 a barrel, the strongest since April 25, 2019.
US West Texas Intermediate (WTI) crude was at $72.97 a barrel, down $0.69 or 0.9%.
OPEC+ is discussing a gradual increase of oil output from August, but no decision has been taken on the exact volume yet, an OPEC+ source said on Tuesday.
The Organisation of the Petroleum Exporting Countries and allies, known as OPEC+, are already returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record output curbs, as demand recovers from the pandemic. The group meets next on July 1.
Both benchmarks have risen for the last four weeks in response to the rollout of global Covid-19 vaccinations and an expected pick-up in summer travel.
“[Because] of tight physical markets and healthy demand perceptions, the risk remains skewed to the upside,” oil brokerage PVM said.
BofA Global Research raised its Brent crude price forecasts for this year and next, saying that tighter oil supply and recovering demand could push oil briefly to $100 per barrel in 2022.
Negotiations to revive the Iran nuclear deal took a pause on Sunday after judge Ebrahim Raisi won the country’s presidential election.
Raisi on Monday backed talks between Iran and six world powers to revive a 2015 nuclear deal, but flatly rejected meeting US President Joe Biden, even if Washington removed all sanctions.
US crude stocks were expected to drop for the fifth consecutive week, while distillate and gasoline were seen rising last week, a preliminary Reuters’ poll showed on Monday.