Global oil prices rebounded on Friday after three consecutive days of losses, driven by renewed optimism over summer fuel demand in Europe and the U.S.
However, despite today’s rally, crude prices are still set to record a weekly loss as markets weigh the potential return of Iranian oil supplies.
As of the time of reporting, Brent Crude rose by 1.86% to $66.32, while U.S. West Texas Intermediate (WTI) climbed 2.20% to $63.30.
Progress in Iran Nuclear Deal Puts Pressure on Market
Oil prices have been under pressure this week as Iran and world powers continue negotiations to revive the 2015 nuclear agreement.
Talks have been ongoing since April, with European Union officials expressing confidence that a deal will soon be reached—potentially paving the way for Iran to ramp up crude exports and increase global supply.
Bullish Bets and Forecasts from Analysts
Despite geopolitical uncertainties, analysts remain cautiously optimistic:
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J.P. Morgan reports that options bets on oil prices exceeding $100 have increased, particularly for December 2021 Brent contracts. The bank forecasts Brent will finish the year at $74 per barrel, provided global demand averages over 102.6 million barrels per day (BPD) in Q3 and 103.6 million BPD in Q4.
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Barclays Bank projects average Brent prices of $66 and WTI at $62 per barrel for 2021. However, it flagged risks from a slowdown in Emerging Markets Asia, excluding China, due to rising COVID-19 cases. Still, Barclays believes widespread vaccinations will prevent long-term disruptions:
“Extended mobility restrictions in the region might slow the demand recovery somewhat, but seem unlikely to stall it for a sustained period.”
What This Means for the Global Market
Today’s oil rally underscores market optimism for summer travel demand, particularly in Western economies, despite ongoing concerns about COVID-19 outbreaks in countries like India.
The balance between increased demand and the potential return of Iranian oil will continue to shape price movements in the coming weeks.
