Oil tops $42 as OPEC+ laggards pledge better compliance

Iraq and Kazakhstan, during a meeting of an OPEC+ panel on Thursday, pledged to comply better with oil cuts, sources said. This means curbs by the Organization of Petroleum Exporting Countries and allies, known as OPEC+, could deepen in July.

“There is enthusiasm in the market that oil supply is still under control,” said Paola Rodriguez Masiu, analyst at Rystad Energy. “A positive OPEC+ meeting does that and yesterday’s session helped renew confidence.”

Brent crude LCOc1 was up 75 cents, or 1.8%, at $42.26 by 1117 GMT after hitting $42.89, its highest since June 8. U.S. West Texas Intermediate (WTI) crude CLc1 climbed 96 cents, or 2.5%, to $39.80.

“The key takeaway is that OPEC+ compliance will improve in the coming months,” said Stephen Brennock of broker PVM.

Both contracts rose about 2% on Thursday and are heading for weekly gains of more than 9%.

Brent has more than doubled since hitting a 21-year low in April, helped by record OPEC+ supply cuts of 9.7 million barrels per day (bpd), or 10% of world demand, and an easing of government lockdowns imposed to control the coronavirus.

Fuel demand in Europe is staging a gradual recovery after the height of the lockdowns in April but remains well below normal, data from several countries shows.

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