UPDATE 7-Oil climbs to highest in over two years as U.S. supplies tighten


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    * Brent climbs over $76/bbl, highest since October 2018
    * U.S. crude tops $74 for first time since October 2018
    * OPEC+ meeting on July 1 set to discuss further easing of

 (Updates to settlement)
    By Devika Krishna Kumar
    NEW YORK, June 23 (Reuters) - Oil prices rose on Wednesday,
with Brent climbing above $76 a barrel to its highest since late
2018, after data showed U.S. crude inventories declined as
travel picks up.
    U.S. crude inventories fell by 7.6 million barrels last week
to 459.1 million barrels, the U.S. Energy Information
Administration said, a much steeper drawdown than the 3.9
million barrels that analysts had expected in a Reuters poll.
    Stockpiles at Cushing, Oklahoma, the delivery point for U.S.
crude futures, fell by 1.8 million barrels to the lowest since
March 2020. Gasoline demand also edged higher last week.
    "People are getting back in their cars again and that's
showing up in the numbers in a big way. That's going to keep the
upward pressure on prices," said Phil Flynn, senior analyst at
Price Futures Group in Chicago. 
    Brent crude  LCOc1  rose 38 cents, or 0.5%, to end the
session at $75.19 a barrel. Its session high, $76.02 after the
EIA data, was the highest since October 2018. U.S. West Texas
Intermediate  CLc1  added 23 cents, or 0.3%, to settle at $73.08
after hitting $74.25, also the highest since October 2018.
    A retreat in the U.S. dollar has also boosted the price of
crude, making it less expensive for buyers holding other
currencies.  USD/ 
    "The inventory relief could provide another reason for the
OPEC+ alliance to boost production further from August, and the
coming meeting next week is expected to be material for policy
and prices going forward," said Rystad Energy’s oil markets
analyst Louise Dickson. 
    Brent has gained more than 45% this year, supported by
supply cuts led by the Organization of the Petroleum Exporting
Countries and its allies (OPEC+) and as easing coronavirus
restrictions boost demand. Some industry executives are talking
of crude returning to $100 for the first time since 2014.
    "Underlying demand in the physical market means that any
corrections lower will remain shallow and short," said Jeffrey
Halley, analyst at brokerage OANDA. 
    OPEC+, which meets on July 1, has been discussing a further
unwinding of last year's record output cuts from August but no
decision has been made, two OPEC+ sources said on Tuesday.
    Global demand is set to rise further in the second half of
the year, though OPEC+ also faces the prospect of rising Iranian
supply if talks with world powers lead to a revival of Tehran's
2015 nuclear deal.  IEA/M   OPEC/M   urn:newsml:reuters.com:*:nL2N2O204D
     Iran said on Wednesday the United States had agreed to
remove all sanctions on Iranian oil and shipping, although
Germany cautioned that major issues remained at talks to revive
the deal.  urn:newsml:reuters.com:*:nL2N2O516Y
    "If indeed sanctions get lifted and Iran is free to boost
production and exports, this may cause a price reaction, but
still the growing demand will absorb the extra barrels and
prices will not experience any major shock," Dickson said.

 (Additional reporting by Laila Kearney, Alex Lawler, Sonali
Paul; Editing by Marguerita Choy, David Evans, David Gregorio
and Kevin Liffey)
 ((devika.kumar@thomsonreuters.com; +1 646 223 6059; Reuters
Messaging: devika.kumar.thomsonreuters.com@reuters.net))

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