Oil settles up near 3-year highs on signs of demand growth

• OPEC+ meeting on July 1 could ease output curbs further

NEW YORK: Oil prices steadied on Thursday, holding close to their highest in almost three years, supported by drawdowns in US inventories and accelerating German economic activity.

Prices also drew support from doubts about the future of the 2015 Iran nuclear deal that could end US sanctions on Iranian crude exports.

Brent settled up 37 cents, or 0.5%, to $75.56 a barrel by 12:28 p.m. EDT (1628 GMT), after earlier rising to $75.78. US crude settled up 22 cent to $73.30 a barrel, after hitting a session high of $73.61 earlier.

On Wednesday, both benchmarks hit their highest since October 2018.

Data from Germany showed the largest upward leap in retail conditions since German reunification more than three decades ago, stoking expectations European fuel demand will recover.

Across the Atlantic, US crude inventories dropped to their lowest since March 2020, official data showed. US gasoline stocks also posted a surprise draw.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+ that meets on July 1, have been discussing a further unwinding of last year’s record output cuts from August but no decision has been made, two OPEC+ sources said on Tuesday.

On Wednesday, Iran said the United States had agreed to remove all sanctions on its oil and shipping but Washington said “nothing is agreed until everything is agreed” in talks to revive the 2015 Iran nuclear deal.

The end of sanctions and a return of Iranian barrels to the global oil market “could still be months and not weeks away,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Indian Oil Minister Dharmendra Pradhan on Thursday urged OPEC to phase out crude output cuts as high prices are stoking inflation.

“Given the good sentiment and robust demand, OPEC+ is likely to find it easy next week to announce a further increase in production, at least for August, without jeopardizing the upswing enjoyed by the oil price,” Commerzbank analysts wrote.

They said “the currently positive general tenor on the oil market” was driving prices up.

Brent has gained more than 45% this year on the OPEC+ supply cuts and recovering demand. Some industry executives have talked of crude returning to $100 for the first time since 2014.