By Shu Zhang and Sonali Paul
SINGAPORE (Reuters) – Oil prices fell on Friday but were set for their third weekly increase on expectations of a recovery in fuel demand in Europe, China and the United States as rising vaccination rates lead to a decrease in pandemic restrictions.
Futures were down 4 cents, or 0.06%, to $ 72.48 a barrel at 0658 GMT, after closing Thursday at its highest since May 2019.
US West Texas Intermediate (WTI) crude futures also fell 4 cents, or 0.06%, to $ 70.25 a barrel, after rising 0.5% to its highest close on Thursday. since October 2018.
Brent is set for a 0.8% weekly increase, while WTI is set to gain 0.9%.
US investment bank Goldman Sachs (NYSE 🙂 expects Brent crude prices to hit $ 80 a barrel this summer, betting that a recent oil market rally will continue as vaccine rollouts fuel global economic activity. and the demand for the product.
Saudi Arabia, the world’s top oil exporter, will supply full volumes of cargo crude for July to its Asian customers, Reuters reported on Friday, citing sources.
“News that Saudi Arabia has reversed all of its voluntary production cuts is circulating in Asia today, and that appears to have temporarily pushed oil prices lower,” Jeffrey Halley, senior market analyst at OANDA, wrote in a note. .
“However, the reaction is modest and, if anything, the price action is bullish. It suggests that the physical market has absorbed the extra-Saudi production with ease and that global demand is strong and increasing.”
Gasoline inventories in the United States, the world’s largest oil consumer, increased by 7 million barrels in the week through June 4, and distillate reserves increased by 4.4 million barrels, both much more than what analysts expected, according to data from US Energy Information. Administration on Wednesday. [EIA/S]
That unexpected spike spurred profit-taking when prices hit a two-and-a-half-year high, said Margaret Yang, a strategist at DailyFX.
Additionally, data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, analysts at ANZ Research said in a note.
“Even the jet fuel market is showing signs of improvement, with flights in Europe increasing 17% in the last two weeks, according to Eurocontrol,” ANZ analysts said.
The Organization of the Petroleum Exporting Countries (OPEC) reinforced the vision of healthy demand and stuck to its forecast that demand in 2021 would increase by 5.95 million barrels per day, 6.6% more than the previous year. .
“Overall, the recovery in world economic growth and thus oil demand is expected to gain momentum in the second half,” OPEC said in its monthly report on Thursday.