Oil prices rose on Tuesday ahead of a meeting of the "OPEC+" coalition, supported by hopes for fuel demand growth in the coming months with the start of the summer driving season in the United States, the world's largest oil consumer. Prices also received an additional boost from Chinese data showing that factory activity increased at the fastest pace this year in May, according to Reuters.
Brent crude futures for August rose by 83 cents, or 1.2%, to $70.15 a barrel by 0223 GMT. West Texas Intermediate (WTI) crude futures increased by $1.29, or about 2%, settling at $67.61 a barrel.
Analysts from "ING Economics" noted in a research memo on Tuesday: "While concerns about increased COVID-19 restrictions across Asia are rising, the market seems more focused on rising demand from the U.S. and parts of Europe."
A source from the Organization of the Petroleum Exporting Countries (OPEC) indicated that the organization and its allies, collectively known as "OPEC+", are likely to maintain the current pace of gradual production cuts at the meeting on Tuesday, balancing expectations of a recovery in demand with a potential increase in Iranian supplies.
The "OPEC+" coalition decided in April to increase production by 2.1 million barrels per day from May to July, anticipating a rise in global demand despite the rising COVID-19 cases in India, the third-largest oil consumer.
ING Economics analysts stated, "We believe the market will be able to absorb the additional supply, so we expect the coalition 'OPEC+' to confirm that it will increase production as scheduled over the next two months."
