Crude oil futures remain supported by global oil demand recovery trade - S&P Global

0328 GMT: Crude oil futures rose during mid-morning Asian trade June 21 as markets continued to price in a recovery in global oil demand, while keeping an eye on the recently resumed Joint Comprehensive Plan of Action negotiations.

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At 11:28 am Singapore time (0328 GMT), the ICE August Brent futures contract was up 47 cents/b (0.64%) from the previous settle at $73.98/b, while the NYMEX WTI July light sweet crude contract was up 55 cents/b (0.77%) at $72.19/b.

This morning's rise extends the uptrend from that of last week ended June 18, during which the Brent and NYMEX light sweet crude markers rose 1.13% and 1.03% to close at $73.51/b and $71.64/b, respectively.

The uptrend in the oil markets come despite hawkish signals from the US Federal Reserve, which is pushing the dollar higher, and can be attributed to markets buying into the global demand recovery narrative.

With rising vaccination rates, and easing mobility restrictions, the US and Europe are at the forefront of this recovery, and analysts have said that the record crude throughput seen in China in May is likely to persist until winter.

ANZ analysts have also noted nascent signs of improvement in India's downstream products demand, as parts of the country relax lockdown restrictions following a sustained downtrend in COVID-19 infections.

"Sales of the nation's two most used road fuels [gasoline and diesel] rose 13% in the first half of June, compared with the same period last month," they said, referring to data compiled by the state's refiners.

In other news, negotiations over the Joint Comprehensive Plan of Action have resumed in Vienna on June 20 after the election of Ebrahim Raisi as Iran's president. Raisi had earlier said that he is committed to the JCPOA.

Raisi's top energy adviser, Alireza Zeyghami, a former deputy oil minister, told S&P Global Platts that under Raisi, Iran would seek a quick return to its pre-sanctions crude production of near 4 million b/d, with or without an agreement. Many buyers of Iranian crude, however, will await the restoration of the JCPOA before purchasing Iranian crude, as they will not want to risk incurring sanctions penalties.

S&P Global Platts Analytics expects that a JCPOA agreement could lead to sanctions relief by September, which would boost crude and condensate exports to 1.5 million b/d by December, from 600,000 b/d in May.

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