By Peter Nurse
Investing.com -- Oil prices edged up Tuesday, near multi-year highs as the market’s outlook remains tight given increasing fuel demand, particularly in the U.S., and only gradual increases in supply.
By 8:45 AM ET (1245 GMT), U.S. crude futures were up 0.5% at $84.16 a barrel, while Brent futures were up 0.4% at $85.50 a barrel.
U.S. Gasoline RBOB Futures were up 0.9% at $2.4655 a gallon.
Oil has soared of late as demand has increased with the ending of Covid-19 restrictions but increases in supply are struggling to keep up. The U.S. WTI contract recently climbed to its highest level since October 2014 and the Brent contract since October 2018.
Further gains look likely, with Larry Fink, chief executive of the world's largest asset manager BlackRock (NYSE:BLK), saying on Tuesday that there is a high probability of oil reaching $100 a barrel.
This largely matched the views of influential U.S. investment bank Goldman Sachs (NYSE:GS), which stated over the weekend that the Brent crude oil price was likely to climb above its year-end forecast of $90 per barrel.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, are due to meet next week to discuss their production levels. The market is not expecting the group to agree to an increase in supply of more than the 400,000 barrels previously agreed to, particularly after comments from Saudi Arabia’s energy minister over the weekend that producers should remain cautious.
Another potential source of additional output for the market to contend with could come from Iran, if the Islamic Republic was able to persuade the U.S. to remove sanctions on its oil industry.
Iran and the European Union are set to hold talks in Brussels on Wednesday designed to clear the way for a wider diplomatic push to revive the 2015 nuclear deal.
That said, the U.N nuclear watchdog said on Monday that Iran is expanding its enrichment of uranium to high levels, something that the Western powers are unlikely to approve of.
On a more immediate level, the American Petroleum Institute is due to report estimates for U.S. oil inventories later in the session. Crude oil stockpiles are expected to have risen by 1.7 million barrels last week, according to a Reuters poll, but gasoline and distillate inventories are expected to fall.