Oil prices on Tuesday hit $70 per barrel on growing optimism that fuel demand will improve in the next quarter.
Brent crude, which Nigeria’s crude oil benchmarked against, settled up 93 cents, or 0.9%, at $70.25 per barrel as of 7.30an on Tuesday compared with $69.32 on Monday.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia will meet today and analysts expect that they will sustain the plans to gradually ease supply cuts until July.
“Trading excitement often drives the market just before OPEC+ meetings, and there is the confidence that the oil producer group will demonstrate supply restraint at its meeting on Tuesday,” oil markets analyst at Rystad Energy, Louise Dickson, said in a note to clients.
The OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, as it estimated global demand would rise despite surging coronavirus cases in India.
OPEC members raised their oil production in May, but lower output in Nigeria, Angola, and Iran partly offset major increases from top producers Saudi Arabia and Iraq leading to a lower-than-expected rise in the cartel’s supply, according to Reuters’ monthly survey.
OPEC’s 13 members have produced 25.52 million barrels per day (bpd) in May, an increase of 280,000 bpd from April, according to the survey of OPEC sources.