Oil prices rose on Wednesday morning, as the market anticipated a tightening of supply later this year. The price of Brent crude was up 0.5% to $67.14 per barrel and U.S West Texas Intermediate (WTI) was trading at $59.90 a barrel, an increase of 0.4%.
The rise in oil prices follows reports that OPEC and its allies are likely to extend their production cuts beyond June when they meet next week in Vienna for talks about how long the cuts should last into 2021.
Analysts believe that demand will start to pick up during the summer months due to increased travel and economic activity after lockdowns around the world begin easing off; however, there is still uncertainty surrounding global demand due to rising coronavirus cases in some countries like India where restrictions have been re-imposed recently.
Additionally, tensions between Iran and Israel could further tighten supplies if Iranian exports were disrupted by any potential military conflict between them or sanctions imposed by other countries, such as the United States against Tehran’s nuclear program. This would lead oil markets even tighter than expected which could cause prices to continue climbing higher over the coming weeks ahead.