Crude Oil Tops $70 As OPEC+ Meets

Oil prices rose on Tuesday, with Brent topping $70 and trading at its highest since March after the OPEC+ alliance forecast a tightening global market ahead of a production policy meeting.

Brent crude futures for August gained 94 cents, or 1.4 percent, to $70.26 a barrel by 07:10 WAT. U.S. West Texas Intermediate crude for July was at $67.66 a barrel, up by $1.34, or 2 percent from Friday's close, with no settlement price for Monday due to a U.S. public holiday. Brent earlier hit a session peak of $70.34, the highest intraday price since March 8.

The oil glut built up during the pandemic has almost gone and stockpiles will slide rapidly in the second half of the year, according to an assessment of the market from an OPEC+ committee. The coalition is expected to ratify a scheduled output increase for July when it meets later Tuesday.

Prices were also boosted after data from China showed that factory activity expanded at its fastest this year in May.

A robust recovery in the U.S. and Europe has given OPEC+ the confidence that markets can absorb additional barrels, despite the prospect of more supply from Iran should a nuclear deal be revived, and a Covid-19 comeback in Asia, most notably India. OPEC’s Joint Technical Committee forecast stockpiles will fall by at least 2 million barrels a day from September through December.

OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, as it anticipated global demand would rise despite surging coronavirus cases in India, the world's third-largest oil consumer.