NEW YORK: Oil prices rose on Wednesday, heading for monthly and quarterly gains, after U.S. crude stockpiles fell for a sixth straight week and an OPEC report foresaw an undersupplied market this year.
The Brent crude contract for August, due to expire on Wednesday, was up 42 cents, or 0.6pc at $75.18 a barrel by 1:29 p.m. ET (1729 GMT.)
The September contract was up 81 cents at $75.09 a barrel. U.S. West Texas Intermediate crude (WTI) was up $1.02 or 1.4pc at $74 a barrel.
Both benchmarks are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months.
A Reuters poll showed that Brent was seen averaging $67.48 a barrel this year and WTI $64.54, both up from May's poll.
U.S. crude stockpiles fell last week for the sixth straight week as refiners ramped up output in response to rising demand, the Energy Information Administration said.
Inventories at Cushing, Oklahoma, the delivery point for WTI, slid to their lowest since March 2020.
"With continued decline of Cushing crude oil inventories and an upcoming OPEC+ meeting tomorrow, I expect crude oil prices will rise as the market has been crying out for more supplies," said Andrew Lipow, president of Lipow Oil Associates in Houston.
The Organization of the Petroleum Exporting Countries and its allies, an alliance known as OPEC+, meet on Thursday.
The group is expected to discuss extending its deal on cutting oil supply beyond April 2022.
An internal OPEC report seen by Reuters said the oil market would be in deficit in the short term but a glut was on the horizon once the OPEC+ supply cuts ended.
Hopes for a broad recovery received a boost from OPEC Secretary General Mohammad Barkindo, who said on Tuesday that demand is expected to rise by 6 million bpd in 2021, with 5 million bpd of that coming in the second half of the year.
Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a 5 million bpd supply shortfall.
"Our hypothesis is that we are going to have global travel-geddon to Europe, more demand for jet fuel that will drive us to $80 a barrel," said Jay Hatfield, portfolio manager for Infracap MLP ETF. "But the real fly in the ointment for the bull case is the UK."
The United Kingdom recorded a further 26,068 cases of COVID-19 on Wednesday, the highest daily figure since January 29 and sending the seven-day tally up 70pc from the week before, official data showed.