Oil prices continued to move closer to the $70 per barrel mark as the market anticipates the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) meeting this week for supply guidance.
At the market on Monday, the price of the Brent crude futures increased by 42 cents or 0.61 per cent to $69.74 per barrel, while the West Texas Intermediate (WTI) crude futures rose by 79 cents or 0.87 per cent to sell at $67.41 per barrel.
OPEC and its allies are expected to stick with a decision to boost output in July when the group gathers today, June 1.
A Joint Technical Committee (JTC), which advises the alliance, kept its global oil demand growth forecast for 2021 unchanged at about 6 million barrels per day after it met last week.
In April, the group agreed to return 2.1 million barrels per day of supply to the market from May to July, as it anticipated global demand would rise despite surging coronavirus cases in India.
Now, as it retains the cut till July, the OPEC+ curbs will stand at 5.8 million barrels per day.
While rebounding demand is driving prices higher, the possibility of more barrels from Iran should a nuclear deal be revived is clouding the outlook.
Iran and global powers have been negotiating since April to work out how the country and the United States should secure the lifting of sanctions on Iran, including its energy sector, in return for Iranian compliance with restrictions on its nuclear work.
Iran and world powers have resumed discussions, the Russian envoy to the United Nations in Vienna said, according to a news report, adding that there was an understanding among the countries involved that the current round should be final.
Analysts have said Iran could provide about one million to two million barrels per day additional oil supply if a deal is struck and sanctions lifted.
Also, the United States, China and parts of Europe is expected to lead to a robust demand recovery from the COVID-19 pandemic, despite a virus comeback across Asia.
In addition, American crude stockpiles have declined in recent weeks, which heralds the start of the summer driving season which coincides with an increase in fuel demand.