Mubasher: Oil prices jumped on Thursday as fuel demand seemed to improve in the US, the world’s biggest consumer, while major crude producers agreed at last to a date for a meeting to discuss their supply cuts in place, according to Reuters.

Moreover, tensions in the Middle East escalated further, as worries mounted regarding a potential confrontation between Iran and the US.

By 7:20 am GMT, US Nymex crude futures jumped by 2.79% to $55.26 per barrel (pb), while international benchmark Brent futures climbed by 2.52% to $63.38 pb.

Oil consumption seemed to be picking up steam into summer, according to National Australia Bank (NAB) chief economist Phin Zeibell.

After hitting their highest levels in almost two years, US crude inventories dropped by 3.1 million barrels last week, the Energy Information Administration (EIA) said.

In addition, refined products also unexpectedly declined due to an upturn in gasoline demand, surging 6.5% from last year.

Another bullish factor was an agreement among members of the Organization of the Petroleum Exporting Countries (OPEC) to meet on 1 and 2 July, after the biannual gathering had been postponed several times.

“The OPEC meeting looks like there’s going to be an extension or even more cuts is a possibility,” NAB’s Zeibell was quoted by Reuters.

The producer group and non-affiliated producers, including Russia, are expected to discuss whether to roll over through the second half of the year a previous pact on withholding 1.2 million barrels per day (bpd) that expires this month.

Tensions in the Middle East flared, after Iran’s Revolutionary Guards have shot down a US “spy” drone in the southern province Hormozgan, as per mentioned on the website of Guards, Sepah News.

The situation in the Middle East remained strained, especially after last week’s crude carrier attack in the Gulf of Oman.

Moreover, boosting oil prices were the prospects of interest rate cut by the Federal Reserve at its next meeting, and the confirmation of a discussion between the US trade negotiator and his Chinese counterpart ahead of a meeting between US President Donald Trump and China’s Xi Jinping next week in the Group of 20 (G20) in Japan.

“Fresh stimulus from the largest economies will greatly improve the demand side argument [and] a positive outcome with the US - China would be icing on the cake,” brokerage OANDA senior market analyst Edward Moya was quoted by Reuters.