Oil futures: Brent makes another push towards $70/b ahead of July contract expiry

London (Quantum Commodity Intelligence) – Brent crude oil futures pulled up just short of $70 per barrel ahead of the July-contract expiry Friday, but markets remain positive on US demand-growth optimism which overshadowed the expanded lockdowns in Japan.

Brent futures for front-month July were trading at $69.82//barrel (1335 GMT), compared to Thursday's settle of $69.46/b, a gain of 0.52%.

The July Brent contract expires later Friday due to the UK bank holiday Monday, while the July/August spread was trading around $0.27/b.

At the same time, July WTI was trading $67.25/b, up 0.60% from Thursday's settle of $66.85/b.

The Brent/WTI spread for July was pegged at around $2.50/b, down $1/b from the prior monthly low of around $3.50/b on May 10, and down around $0.50/b since the start of the week.

It also marks the narrowest daily spread since December of 2020, according to exchange data.

Markets largely shrugged off further lockdown restrictions announced in Japan, while the lifting of Iranian sanctions has taken a back seat ahead of next week's OPEC+ meeting.

OPEC+ will hold its next virtual meeting on June 1, where it will discuss production policy beyond August, along with the potential impact of Iranian oil in the market later this year. 

"The market is broadly expecting a quiet expiry day ahead of OPEC+ Meeting next week," said the London-based Eagle Commodities Brokers in a client note Friday.

"…consensus is that the producer group will go ahead with its scheduled supply increase for June of 700,000 bpd (OPEC +/Audi combined), with Citi indicating its approach to July could change, where a further 840,000 bpd of output is scheduled to return, as US-Iran negotiations progress and sanction relief becomes more likely," said Eagle Brokers.