Brent prices have now registered seven consecutive weeks of gains as tighter fundamentals continue to lay a stronger upward path through to beat the flat price pattern and dull futures time spreads, trading currently with a daily gain of 0.1% at $86.30/bbl. Sentiment remains largely positive with the oil balance set to continue to tighten, while stronger refinery margins are also providing some support.

OPEC+ is going to put a huge deficit into the market into the second half of this year. Some analysts outline, that the Saudis will be unlikely to reverse the cuts at $90 or $92 oil. The OPEC+’s frontmen are more likely looking to ensure that the oil supply deficits they are creating are materializing and prove to be more deep-rooted, before they decide to put the brake.

The downside risks remain limited as long as OPEC+ maintain production at the current tight levels, not least considering IEA’s forecast from last week that oil demand surged to a record high in June and may rise even further.

Meanwhile, the U.S. Administration’s options for bringing the price of gasoline down aren’t numerous. Should national average prices spike to $4+ per gallon again, energy analysts expect more draws from the Strategic PB etroleum Reserve (SPR), but this isn’t a very good option after last year’s releases from the SPR evoked a lot of Congressional critique for undermining the U.S. national security by doing that.