Oil futures: Brent, WTI hit fresh highs as trading bosses give upbeat outlook

Commodity Intelligence) – Crude oil futures reached fresh multiyear highs in late-afternoon London trading Tuesday, as demand growth optimism underpinned soaring prices, while a lack of progress on the Iranian nuclear talks keeps the supply-side constrained.

Front-month August Brent futures were trading at $73.69/barrel (1630 GMT), compared to Monday's settle of $72.86/b, having earlier hit a fresh two-year high of $73.90/b.

At the same time July WTI was trading $71.75/b, up from Monday's settle of $70.88/b. Earlier in the session WTI traded at $72.03/b, the highest price since October 2018.

The upbeat momentum was captured at the FT Commodities Global Summit Tuesday, where top trading bosses expressed their views.

On oil prices, Russel Hardy, the head of private trading house Vitol, said he expected oil prices to move from $70 to 80/b this year – a forecast that does not stray from recent projections made by Goldman Sachs and other analysts who predict sluggish supply will be outweighed by a global economic recovery.

That figure, according to Jeremy Weir, CEO of independent trading house Trafigura, could rise to $100/b, largely on a lack of investment in upstream.

"We have gone from 15 years of oil reserves to 10 years and capital expenditure go from five years ago $400 billion a year to just $100 billion," he told the summit.

Meanwhile, the latest round of talks between Iran and the international community have been taking place in Vienna and despite positive noises from the Tehran camp, there is no sign from the US or EU of a breakthrough ahead of the June 18 Iranian elections.

Bloomberg reported Iran claimed it had reached a 'broad agreement' with the US over the lifting of sanctions on its industrial sectors, including energy, saying there was "very little" time left for world powers to revive the 2015 nuclear deal.

However, foreign ministry spokesman Saeed Khatibzadeh said the re-imposition of the JCPOA was being delayed because there were still some sticking points, said the Bloomberg report.