London — Oil prices were lifted on Wednesday by prospects for stronger global economic growth, though gains were capped as talks to revive a nuclear deal with Iran raised the possibility of an easing of sanctions on its oil exports.
Brent crude futures gained 54c, or 0.9%, to $63.28 a barrel by 10.53am GMT while US West Texas Intermediate (WTI) crude was rose 46c, or 0.8%, to $59.79.
“Optimism on the global economic outlook boosted sentiment in the crude oil market,” analysts from ANZ bank said.
The International Monetary Fund (IMF) said on Tuesday that unprecedented public spending to fight Covid-19 would push global growth to 6% this year, a rate not achieved since the 1970s.
However, a possible jump in US fuel inventories and the Iran talks weighed on prices.
US crude stocks were down by 2.6-million barrels in the week ended April 2, while petrol inventories rose by 4.6-million barrels and distillate stocks up by 2.8-million barrels, said three market sources, citing the American Petroleum Institute (API).
Official data is due to be released later on Wednesday.
Iran and world powers held what they described as “constructive” talks on Tuesday and agreed to form working groups to discuss the possibility of reviving the 2015 nuclear deal that could lead to Washington lifting sanctions on Iran’s energy sector and increasing oil supply.
“Iran is the single largest upside supply risk for the oil market,” said Stephen Brennock of oil brokerage PVM.
Oil prices dropped earlier this week after oil cartel Opec and allies (Opec+) agreed to gradually ease oil output cuts from May. But analysts say the size of the increase is unlikely to have a major impact on market rebalancing.
“The Opec+ decision … is not expected to jeopardise the oil rebalancing, hence the elevated price backdrop,” Brennock said.