By Gina Lee
Investing.com – Oil was down Friday morning in Asia but was expected to end the week with a third weekly gain. Black liquid has hovered near the $ 70 mark as investors continue to digest the divergent outlook for fuel demand.
Brent oil futures rose 0.43% to $ 72.21 at 12:06 am ET (4:06 am GMT) and WTI futures jumped 0.43% to $ 69.99. Futures in New York stabilized on Friday after closing at their highest since October 2018 in the previous session.
With traffic in the United States and most of Europe almost back to pre-COVID-19 levels, the Organization of the Petroleum Exporting Countries (OPEC) predicts that the recovery in fuel demand will accelerate in the second half of 2021.
“Overall, the recovery in global economic growth, and therefore in demand for oil, is expected to accelerate in the second half of the year,” the cartel said in its monthly report released Thursday. The report also predicted that demand for oil could increase by about 5 million barrels per day, or about 5%, in the second half of 2021 compared to the first half.
However, investors also continued to digest Wednesday’s data from the US Energy Information Administration which showed a larger-than-expected 5.241 million barrels of crude oil supply in the United States for the week ending. June 4.
The data also showed a much larger than expected build up of 7 million barrels in gasoline inventories in the United States.
“If you look at the week, we certainly saw prices rise on some demand expectations, but it was mixed… the US inventory data didn’t give a good picture. We saw gasoline and distillate inventories. really going up. Towards the end of the week that weighed on the spirits, “Vivek Dhar, a commodities analyst at the Commonwealth Bank, told Reuters.
Meanwhile, investors also continue to monitor the progress of talks to revive a 2015 nuclear deal between Iran and world powers.
The United States has lifted sanctions on three former Iranian officials and two companies that previously traded Iranian petrochemicals ahead of the sixth round of talks set to begin this weekend. However, it remains to be seen whether a resolution can be found ahead of Iran’s presidential elections on June 18, 2021.
A successful resolution would see Iranian exports add to the global supply.
Oil drop, but set to post third weekly gain
Gold holds gains as investors weigh on US inflation, ECB move
Oil set to post third weekly gain thanks to improving demand outlook