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Oil prices rose by 1 percent early on Wednesday and were set for the best performance in a first half of a year since 2009, as demand recovery and advances in vaccine programs have pushed up prices by more than 40 percent since the start of 2021.
Oil prices jumped by over 40 percent between January and June this year, registering its best first-half performance since the first half of 2009, according to Bloomberg estimates.
Recovering oil demand with the reopening of economies and expectations of further acceleration of consumption later this year have supported oil prices in the first half of the year, despite the resurgence of COVID infections in India and wider Asia in the spring.
This week, oil firmed late on Tuesday to settle higher, after the American Petroleum Institute (API) estimated a massive draw in crude oil inventories of 8.153 million barrels for the week ending June 25. Prices had faltered for most of Tuesday on the back of rising infections of the Delta variant of COVID in Europe and the United States.
On Wednesday, oil prices were supported by market expectations about the OPEC+ meeting on Thursday set to discuss the further easing of the oil production cuts as of August 1.
“Indications that Saudi Arabia and Russia were engaged in a tussle over the OPEC/non-OPEC supply policy for August proved supportive for crude market sentiment,” Vanda Insights said in a daily note on Wednesday.
“We continue to believe that the group will agree on a supply increase of around 500Mbbls/d. However, there clearly is the potential for a few surprises, with some members likely to believe that current price levels justify a more meaningful increase,” ING strategists Warren Patterson and Wenyu Yao said today.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.