Brent Crude Oil price advances more than $70 per barrel today, the highest since the pandemic. OPEC+ forecasts a tightening global market supply after the oil producers nation plan to reduce supply increase. The successful vaccination, economic reopening, and summer travel months in the US and Europe will absorb the existing inventory. The analysts forecast that the oil stockpile will drop by 2 million barrels per day between September and December.
In addition, the rise of the US core inflation historically increases the crude oil price. The core inflation number exceeds the 2% target and is currently sitting at 3%. The Federal Reserve Chairman commits to applying an easy money policy and plans to overshoot the inflation target to ensure economic recovery.
Robust economic recovery in the US and Europe has absorbed the existing inventory, and stockpile will drop by 2 million barrels a day between September and December. Oil could trade between $75 – $80 per barrel in the absence of Iranian oil supply.