Oil prices nudged up on Monday, as there is a strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could show a delay in resumption of supplies from the OPEC producer.
Brent crude futures for August gained 30 cents, or 0.4%, to $73.81 a barrel by 0051 GMT, while US West Texas Intermediate (WTI) crude for July was at $71.96 a barrel, up 32 cents, or 0.5%.
Both benchmarks have profited for the past four weeks amid optimism over the pace of global vaccinations and a pick-up in summer travel. The rebound has already pushed up spot premiums for crude in Asia and Europe to multi-month highs.
"The rebound in demand in the northern hemisphere summer is so strong that the market is becoming increasingly concerned about further sharp drawdowns on inventories," ANZ analysts stated.
Negotiations to revive the Iran nuclear deal that took a pause on Sunday after hardline judge Ebrahim Raisi won Iran's presidential election amid a low turnout on Saturday. Two diplomats stated they expected a break of around 10 days.
ANZ predicts the election could delay the nuclear deal, the bank stated, the possibility of Iranian oil hitting the market in the short term looks unlikely,” adding that Iran is insisting that US sanctions placed on Raisi be removed before an agreement is reached.