Oil prices fell today, Friday, but are heading towards a rise for a third week, thanks to expectations of a recovery in fuel demand in Europe, China and the United States, as increased vaccination rates lead to easing restrictions imposed due to the Corona pandemic.
Brent crude futures were down 4 cents, or 0.06%, at $72.48 by 06:58 GMT, after closing at their highest level since May 2019 on Thursday.US West Texas Intermediate crude futures also fell 4 cents, or 0.06%, to $70.25 a barrel, after rising 0.5% on Thursday to close at their highest levels since October 2018.
Brent is heading for a 0.8% weekly gain while WTI is heading for a 0.9% gain.
US investment bank Goldman Sachs expects Brent crude prices to reach $80 a barrel this summer, betting that the recent rise in the oil market will continue as the distribution of vaccines against the Corona virus boosts global economic activity and demand for crude.
Reuters reported on Friday, quoting sources, that Saudi Arabia, the world’s largest oil exporter, will supply all crude quantities for loading in July to customers in Asia.
Gasoline stocks in the United States, the world’s largest oil consumer, rose 7 million barrels in the week to June 4, and distillate stocks rose 4.4 million barrels, much more than analysts’ expectations, according to US Energy Information Administration data on Wednesday.
The unexpected increase spurred a profit-taking sell-off, as prices rose to a two-and-a-half year high, said Margaret Yang, an expert at the Daily Fix.
In addition, ANZ analysts said data revealing that road traffic is returning to pre-Covid-19 levels in North America and most of Europe is encouraging.
“Even the jet fuel market is showing signs of improvement, while flights in Europe have risen 17% over the past two weeks, according to Eurocontrol,” ANZ analysts said.
The Organization of the Petroleum Exporting Countries (OPEC) reinforced the demand strength view, and stuck to its forecast that demand in 2021 will rise by 5.95 million barrels per day, an increase of 6.6% from a year ago.
“In general, the recovery in global economic growth, and therefore oil demand, is expected to gain momentum in the second half of the year,” OPEC said in its monthly report on Thursday.