The Brent crude contract for August, due to expire on Wednesday, was up 28 cents, or 0.4% at $75.04 a barrel by 11:22 (1522 GMT.) The September contract was up 17 cents at $74.45 a barrel. U.S. West Texas Intermediate crude (WTI) was up 23 cents, or 0.3% at $73.21 a barrel.
Both benchmarks are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months.
A Reuters poll showed that Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from May’s poll.
U.S. crude stockpiles fell last week for the sixth straight week as refiners ramped up output in response to rising demand, the Energy Information Administration said.
Inventories at Cushing, Oklahoma, the delivery point for WTI, slid to their lowest since March 2020.
“With continued decline of Cushing crude oil inventories and an upcoming OPEC+ meeting tomorrow, I expect crude oil prices will rise as the market has been crying out for more supplies,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
The Organization of the Petroleum Exporting Countries and its allies, an alliance known as OPEC+, meet on Thursday. The group is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year’s record oil output curbs.
Hopes for a broad recovery received a boost from OPEC Secretary General Mohammad Barkindo, who said on Tuesday that demand is expected to rise by 6 million bpd in 2021, with 5 million bpd of that coming in the second half of the year.
GRAPHIC: Global oil supply deficit in 2021 tmsnrt.rs/3y15XBb
Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a 5 million bpd supply shortfall.
Still, an internal OPEC report seen by Reuters highlights that the oil market could return to a glut after the group is expected to unravel oil production cuts of under 6 million bpd by April 2022.
OPEC+ is expected to discuss a potential extension of its current oil supply deal beyond April 2022 when it meets on Thursday, two sources told Reuters.