Oil futures: Brent rebounds slightly after falling from post-pandemic high
London (Quantum Commodity Intelligence) – Crude oil futures have moved slightly higher again amid choppy afternoon trading in London hours Thursday, after dropping in morning trade from a post-pandemic high.
At 1405 UK time, front-month August Brent futures were changing hands at around $71.39/b, down from an intra-day day high of $71.56/b and just above Wednesday's settle of $71.35/b.
Earlier, in Asia trading hours, the front-month crude future hit a high of $71.96/b buoyed by growing optimism on demand and the absence of any clear progress on a deal that would lift sanctions against Iran.
At the same time in London trading, July WTI was last seen at $68.94/b, also slightly up from its settle on Wednesday of $68.83/b.
The fall during European trading has occurred despite a sharp fall in the dollar index Thursday amid news of fast-growing European economies, which is coupled with concerns of soaring inflation.
Eurozone and UK service sectors have rebounded sharply in May, according to a survey of purchasing managers by IHS Markit Thursday.
Activity at UK service providers jumped in May at its fastest rate in 24 years.
"Real-time traffic data shows activity on the roads is rising strongly, boosting the case for a summer demand rebound. UK traffic was higher than pre-pandemic levels," said Daniel Hynes, Senior Commodity Strategist at ANZ.
A large fall in US crude stocks was offset by builds in gasoline and distillates last week, according to the American Petroleum Institute.
The US Energy Information Administration will release its weekly oil statistics data at 1530 UK time.
Meanwhile, this week's OPEC+ decision to take a cautious approach and not announce further production hikes in August continued to support prices.
"Sentiment on the oil market is very good thanks to the strong recovery of demand and the production discipline shown by OPEC+," said Commerzbank in a market note.
"The fact that Tuesday's meeting took a mere 20 minutes, making it the shortest in the organisation's history, is additional evidence of the group's unity and confidence in the current recovery of the market and prices," added Commerzbank.
Mixed messages continue to emerge from Vienna as diplomats look for a breakthrough in talks allowing Iran to return to the international fold.
Amrita Sen, chief oil analyst at Energy Aspects, told CNBC on Wednesday that the timeline for reaching a deal was slipping and could be further delayed by the Iranian elections and subsequent change in government, particularly to a hardline regime.
