Oil Prices Hit Two-Year High as OPEC Sees Higher Demand

By Kurt Stolz on 1 June 2021
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The price of oil settled at a two-year after OPC and its allies said they would maintain the current output plan amidst a forecast of higher demand.

Brent crude, the is the leading global price benchmark for Atlantic basin crude oils, rose 1.3% to $70.25 a barrel, its highest close since May 2019.

Meanwhile, West Texas Intermediate futures, a key U.S. gauge, was up 2.1% to $67.72 a barrel, closing at its highest level since June 2018.

With coronavirus infection rates largely in check in much of Asia and the drive to vaccinate as much as 70% of the populace moving ahead in the United States, it appears that OPEC and its non-OPEC allies led by Russia are wagering that the world is ready for more oil.

An OPEC technical committee issued a forecast Monday that sees oil demand jumping by six million barrels per day in the second half of 2021, with global oil stocks falling below their five-year average for the 2015-2019 period by the end of July. This would in turn indicate that the pandemic glut of oil is over.

This is not good news for drivers, who already saw the highest gasoline prices at the pump in seven years over the Memorial Day holiday.  The price for a gallon of petrol, now averaging over $3 per gallon, is expected to remain elevated during the summer, analysts said.

(Photo: Accura Media Group)