FX.co ★ The black gold market has perked up. OPEC+ forecasts allow oil to return to growth

On Tuesday morning, world oil prices showed a steady increase. According to experts, the main reason for the euphoria of the black gold market is the news about the decision of OPEC+ to increase the short-term scenario of growth in oil demand worldwide.

The price of July futures for the North Sea Brent blend increased by 0.77% – to $65.53 per barrel, while June futures rose by 0.7% - to $66.11. Meanwhile, the price of June futures for WTI oil rose by 0.76% - to $62.38 per barrel.

On Monday, the price of oil reported a significant decline following the collapse of the previous week. However, it is important to note that the oil quotes earlier partially returned the previously lost positions, although they closed with a decline. So, June WTI oil futures sank by 0.4% - to $61.91 per barrel after reaching an intraday low of $60.66. Meanwhile, June Brent futures lost 0.7% to settle at $65.65 a barrel, after falling well below $65 a barrel earlier.

May gasoline contracts fell by 0.9% to $1.98 a gallon, while May heating oil futures gained 0.3% to $1.88 a gallon. Finally, May contracts for natural gas gained 2.2%, closing at $2.79 per million BTU.

It became known yesterday that the OPEC+ committee of experts increased the forecast for the growth of global demand for black gold to 6 million barrels per day in 2021 from the March level of 5.6 million.

The media also reported that the OPEC+ alliance will hold a meeting of the ministerial monitoring committee on Tuesday – a day earlier than planned. Analysts are confident that the participants of the OPEC+ meeting will take into account the balance of the improving situation in China, the United States and Europe and the frightening data from India.

During a speech on Monday, the Secretary General of the international organization, Mohammed Barkindo, spoke about positive trends in the recovery of the global economy and the growth of the oil industry. However, the situation around COVID-19 continues to threaten trouble for oil demand, reducing the overall level of global economic recovery. The situation is particularly alarming in India, where the daily increase in infected people reaches 350 thousand, which is more than a third of the global number of new cases of infection. At the same time, the number of deaths there is about 200 thousand, which is the fourth largest indicator in the world.

India is one of the largest oil importing countries, so multiple restrictive measures on the territory of the state reduce the level of recovery of global demand for raw materials. Despite the fact that the country's authorities did not declare a nationwide lockdown, multiple regional restrictions were imposed on the territory of the state.

According to some reports, the situation in India may reduce global demand by 300 thousand barrels per day, which will undoubtedly affect oil prices extremely negatively.

As for the forecasts of experts about other major participants in the black gold market, many analysts believe that the Iranian oil supply by the end of this year can recover to 3 million barrels per day against the current level of 2.3 million barrels.