Oil drops but close to 2018 highs

Oil was falling Monday morning in Asia after rising to levels last witnessed in October 2018.

Negotiations within the U.S. and Iran on improving a nuclear deal are ready to proceed. At the same time, the Organization of the Petroleum Exporting Countries and partners (OPEC+) will attend later in the week.

Brent oil futures were falling 0.23% to $75.21 by 11:45 PM ET (3:45 AM GMT), rolling over to the Sep. 21 contract on Jun. 27, 2021. WTI futures crept down 0.08% to $73.99.

OPEC+ will review supplies for August 2021 when it convenes on Jul. 1 and could further reduce current supply curbs as the fuel demand outlook extends to improve.

OPEC+ expected to balance demand

They expect OPEC+ will try to balance the market’s demand for more supply versus the fragile nature of the recovery in need, at next week’s meeting, with jet fuel demand recovery capped as international borders continue closed, ANZ analysts stated.

They also require the cartel to increase production by around 500,000 bpd in August, possibly supporting higher prices.

The black liquid completed the prior week with its fifth week of gains as economic recoveries remain in key markets such as the U.S. and China, the world’s top oil exporter and importer, individually. OPEC+ has also kept supply discipline on the supply side and will return 2.1 million barrels per day to the global supply from May throughout July 2021.

Nevertheless, investors also have an eye on the spread of the Delta variant of the coronavirus in other countries such as Australia.

Meantime, negotiations between Iran and the U.S. to improve the 2015 nuclear deal are supposed to resume in the coming days after a monitoring agreement between the two sides terminated during the prior week. The deal, if revived, would see Iranian exports added to the global supply.