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Oil in New York topped $70 a barrel for the first time since October 2018 as upbeat comments on the market from major trader Vitol Group added to optimism over the global demand recovery.

Futures rose as much as 0.6% after posting a second weekly gain, while global Brent traded above $72 a barrel. OPEC+ appears in control of crude prices, with U.S. production lagging pre-pandemic levels, Mike Muller, Vitol’s head of Asia, said at a conference on Sunday. The alliance is returning supply after output cuts helped to tighten the market.

A robust rebound from the virus in the U.S., China and Europe has driven prices more than 40% higher this year, although the Covid-19 comeback in Asia is a reminder that the recovery will be uneven. Russia’s Rosneft PJSC, meanwhile, warned of an impending shortfall in supply as global producers increasingly channel funds into a “hasty" energy transition.

“I expect crude oil to continue to push higher," said Daniel Hynes, senior commodities strategist at Australia and New Zealand Banking Group Ltd. “The focus remains on demand, with traffic data suggesting the summer driving season should be positive."

The market has firmed in a bullish structure. The prompt timespread for Brent is 41 cents in backwardation -- where near-dated prices are more expensive than later-dated ones. That compares with 37 cents a week earlier.

The decline in U.S. drilling and output makes OPEC+’s job of managing markets easier, Vitol’s Muller said at an event hosted by consultant Gulf Intelligence. Given delays in talks between Tehran and world powers on reviving a nuclear deal, it’s less likely more Iranian crude supply will hit the market before the fourth quarter, he added.

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.

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