Crude extends gains, Brent around $84.50/b

Quantum Commodity Intelligence – Crude oil futures in after-hours trading in Asia extended the week’s gains to about 3 percent on Wednesday, as benchmarks continued to pull away from near three-month lows last Friday.

First month Jul24 ICE Brent futures were trading at $84.53/b (0710 GMT), compared with Tuesday’s settlement of $84.22/b, while the more liquid August 24 contract traded $84.30/b.

At the same time Jul24 NYMEX WTI trade at $80.24/bfrom Tuesday’s settlement of $79.83/b.

Markets were supported by an expected increase in demand for transportation fuels, while OPEC+ is expected to stick with production cuts despite higher prices this week.

“Oil prices are rising on hopes of strong US summer fuel demand and prospects that OPEC+ will maintain supply cuts at their meeting later this week. US data showed domestic air travel rose 5% month-on-month in May, supporting this view of strong demand as the driving season also kicks off in the US,” commented City Index analyst Fiona Cincotta.

Inflation takes center stage this week with Germany’s CPI report out later on Wednesday. This is followed by Eurozone inflation figures, which follow the US PCE price index on Friday on the same day.

However, the outlook for a summer rate cut in the US remains bleak, with another Fed official expressing concern about inflation. Minneapolis Federal Reserve President Neel Kashkari said he needed to see “many more months” of data showing a reduction in inflation before a cut could be considered, adding that he would not rule out another rate hike .

Meanwhile, the IMF raised its forecast for China’s growth this year to 5 percent from 4.6 percent previously, citing solid first-quarter numbers and recent stimulus policy measures.

This week’s reports from the EIA and API were delayed by 24 hours due to the US holiday on Monday.