Oil Stable Near $ 70 In Hope To Regain Demand By Reuters

By Shadia Nasralla

LONDON (Reuters) – Oil was around $ 70 a barrel on Friday, supported by production cuts by major oil producers and optimism about a recovery in demand in the second half of the year.

The benchmark index was up 3 cents, or 0.04%, at $ 69.66 a barrel at 1058 GMT, while US West Texas Intermediate crude was at $ 66.03 a barrel, 1 cent more or 0.02%. Both recovered from losses earlier in the session during Asian trading.

Brent is set for its eighth straight week of gains after prices hit a 13-month high on Monday.

The Organization of the Petroleum Exporting Countries forecast a stronger recovery in oil demand this year, weighted in the second half. OPEC, Russia and their allies decided last week to keep their production restrictions almost unchanged.

“The stronger-than-expected rally in the second half of this year implies that the global economy and thus the outlook for oil demand is close to shaking off its COVID woes,” PVM analysts said.

Analysts at RBC Capital said the fundamentals for summer gasoline were the most optimistic in nearly a decade.

The United States, the world’s largest oil consumer, experienced a major pull in US gasoline stocks last week when a winter storm in Texas disrupted refining production. [EIA/S]

Sustained higher oil prices are expected to encourage US producers to increase production, which could eventually affect prices, JP Morgan analysts wrote.

JP Morgan expects US oil production to average 11.36 million bpd this year compared to 11.32 million bpd in 2020.

Commerzbank (DE 🙂 expects oil to drop to around $ 60 during 2021.