WTI holds in bullish territory

Oil prices have been mixed at the start of the week. WTI spot printed a low of $70.17 before recovering into positive territory at $71.17 ending 0.5% higher on the day but still below the highest levels in more than two years.

US crude production is on the rise and Britain's delayed COVID-19 reopening has dampened expectations for fuel demand growth and tighter supplies.

''A Summer Breakout continues to play out in energy markets, as a global vaccination rollout is set to drive mobility sharply higher this summer, while OPEC's cautious plan to raise output should tighten the market with considerable deficits expected in the coming months,'' analysts at TD Securities argued.

Elsewhere, the US Energy Information Administration (EIA) forecast that shale oil output, which accounts for more than two-thirds of US production, was expected to rise by about 38,000 barrels per day (bpd) in July to about 7.8 million bpd.

"We started off strong on expectations that the demand situation was building momentum as COVID vaccinations were high," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "Then the EIA report took the winds out of the sail."

The analysts at TD Securities explained that market conditions could prompt OPEC+ to ramp up the pace on the unwind of their deal.

''And, while Headline Havoc sparked some volatility late last week, as participants believed that the US was set to imminently lift sanctions on Iranian oil, the Administration's move does suggest that negotiations continue to progress towards an agreement for the Iran Nuclear Deal.

In this sense, the breakout north of $70/bbl may not be sustainable, but a Summer Breakout can continue to play out in the near-term.''