Prices for petroleum rose on Wednesday, heading for monthly and quarterly gains, after industry data suggested U.S. crude stockpiles were shrinking while a report from the Organization of the Petroleum Exporting Countries (OPEC) foresaw an undersupplied market this year, but a possible glut next year.
The Brent crude contract for August, due to expire on Wednesday, was up 83 cents, or 1.1% at $75.59 a barrel early Wednesday morning. The September contract was up 99 cents at $75.27 a barrel. U.S. crude was up $1.10, or 1.5% at $74.08 a barrel.
Both Brent and WTIs are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months.
Meanwhile, crude stocks in the United States were down by 8.2 million barrels, American Petroleum Institute data showed. Government data is due later on Wednesday.
Hopes for a broad recovery received a boost from OPEC Secretary General Mohammad Barkindo, who said on Tuesday that demand is expected to rise by six million barrels per day (bpd) in 2021, with five million bpd of that coming in the second half of the year.
Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a five-million bpd supply shortfall.
However, an internal OPEC report seen by Reuters highlights that the oil market could return to a glut after the group is expected to unravel oil production cuts of under 6 million barrels per day by April 2022.
OPEC+ is expected to discuss a potential extension of its current oil supply deal beyond April 2022 when it meets on Thursday.