(Bloomberg) –Oil climbed for a second month as OPEC and its allies predict stocks will drop sharply this year if the group sticks to its plan.

Futures rose 0.9% on Monday in New York, taking their monthly gain to more than 5% as the cartel said an excess supply will mostly disappear by the end of next month . Inventories are expected to decline by at least 2 million barrels a day from September to December, the group said.

West Texas Intermediate for July delivery gained 59 cents to $ 66.91 a barrel on the New York Mercantile Exchange with no settlement due to the U.S. Memorial Day holiday

“The demand is strong, it is going to rise and stocks are not going to rise,” Bart Melek, chief commodity strategy officer at TD Securities, said by phone.

Oil has climbed more than 35% this year as the Saudi-Russian-led OPEC + alliance cautiously restores supplies cut when the pandemic reduced demand for fuel. At a meeting of its ministers on Tuesday, the group of 23 countries are expected to approve an increase in production slated for July, completing the return of just over 2 million barrels per day of supply interrupted since April of l ‘last year.

This time it’s different: apart from OPEC +, oil growth is stalling

The United States, China and parts of Europe are driving a strong recovery in demand after the Covid-19 pandemic, despite a return of the virus to Asia. U.S. gasoline inventories have declined and consumption has increased as Memorial Day weekend approaches, which heralds the start of the summer driving season and peak fuel demand.

Average retail prices for regular gasoline in the United States jumped to $ 3.046 per gallon on Sunday, the highest since October 2014, according to the AAA Automobile Club.

As the rebound in demand pushes prices up, the possibility of more barrels from Iran, if a nuclear deal is revived, darkens the outlook.

Iran and world powers have resumed talks which, according to Russia’s envoy to the United Nations in Vienna, “should be final” to determine the way forward for the United States to relax sanctions on exports the country’s oil in exchange for limits on the Middle Eastern country’s nuclear program. Iran will act quickly to increase oil production and has no problem finding buyers for its crude, Oil Minister Bijan Namdar Zanganeh told reporters in Tehran on Monday.

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