Oil edged higher after dropping last week, with the focus on an OPEC+ supply meeting on Sunday and U.S. demand at the start of the summer driving season. 

Brent futures held above US$82 a barrel after dropping 2.2 per cent last week and touching the lowest since early February. West Texas Intermediate was above $78. The Organization of the Petroleum Exporting Countries and its allies will hold a policy meeting online, and are widely expected to prolong production cuts into the second half of 2024.

Activity was muted with a holiday in the UK and the US, where the Memorial Day weekend kicks off the summer driving season, which will provide clues on demand trends. Early signs have pointed to a solid showing, with expectations that the number of people to fly over the weekend will be the highest in nearly 20 years, according to the American Automobile Association. 

“We saw a very strong demand from the US last week ahead of the Memorial day long weekend,” said Giovanni Staunovo, a commodity strategist at UBS Group AG. “Record flight activity and strong gasoline demand should give some support to oil prices.”

Brent is up about 7 per cent this year, supported by persistent geopolitical risks and OPEC+’s roughly 2 million barrels a day of output cuts. Still, futures have fallen since mid-April as concern have eased that the conflict in the Middle East would spread and disrupt oil flows. 

Prices:

• Brent for July settlement rose 0.8 per cent to $82.74 a barrel at 2:08 p.m. in London.
• The prompt spread was 24 cents in backwardation, compared with 65 cents at start of the month
• WTI for July delivery climbed 0.8 per cent to $78.32 a barrel.