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Oil prices fell on Friday but were set for their third weekly rise on expectations of a recovery in fuel demand in Europe, China and the United States as rising vaccination rates lead to an easing of pandemic restrictions.
Brent crude futures fell 23 cents, or 0.3%, to $72.29 a barrel at 0145 GMT, reversing most of Thursday’s climb to the highest closing price since May 2019.
US West Texas Intermediate (WTI) crude futures fell 22 cents, or 0.3%, to $70.07 a barrel, after rising 0.5% on Thursday to its highest close since October 2018.
Brent is up 0.5% this week, while WTI is set to rise 0.6%.
“If you look at the week, we’ve certainly seen prices rise on some demand expectations, but it was mixed,” Commonwealth Bank commodities analyst Vivek Dhar said.
“The stock data in the US didn’t give a good picture. We saw the stocks of gasoline and distillate increase enormously. By the end of the week that put a damper on the spirit,” he said.
The US Energy Information Administration reported Wednesday that gasoline inventories rose by 7 million barrels in the week to June 4 and distillate inventories by 4.4 million barrels, both far more than analysts had expected.
However, data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe has been encouraging, ANZ Research analysts said in a note.
“Even the jet fuel market is showing signs of improvement, with flights in Europe up 17% in the past two weeks, according to Eurocontrol,” ANZ analysts said.
Reinforcing the picture of healthy demand, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast that demand would grow by 5.95 million barrels per day in 2021, 6.6% more than a year earlier. read more
“In general, the recovery in global economic growth, and thus oil demand, is expected to gain momentum in the second half,” OPEC said in its monthly report.
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