News: Oil steady near $70 on hopes of recovering demand.
LONDON (Reuters) – Oil hovered near $ 70 a barrel on Friday, aided by production cuts by major oil producers and optimism about a recovery in demand in the second half of the year.
The Brent benchmark rose 3 cents, or 0.04%, to $ 69.66 a barrel by 1058 GMT, while US West Texas Intermediate crude oil was at $ 66.03 a barrel, up 1 cent, or 0.02% . Both rebounded from losses early in the session during Asian trading.
Brent is facing eight straight week of earnings after prices hit a 13-month high on Monday.
The Organization of the Petroleum Exporting Countries is forecasting a stronger recovery in oil demand this year, weighted for the second half of the year. OPEC, Russia and their allies decided last week to keep their production restrictions almost unchanged.
“The unexpectedly strong recovery in the second half of the year implies that the outlook for the global economy and thus for oil demand is on the verge of shaking off its COVID problems,” said PVM analysts.
RBC Capital analysts said summer gasoline fundamentals were the most optimistic in nearly a decade.
The United States, the world’s largest consumer of oil, saw a sharp decline in US gasoline supplies last week when the Texas winter storm disrupted refinery production. [EIA/S]
Persistently higher oil prices should encourage US producers to increase production, which could ultimately weigh on prices, according to analysts at JP Morgan.
JP Morgan expects average US oil production this year to be 11.36 million bpd compared to 11.32 million bpd in 2020.
Commerzbank expects oil to drop to around $ 60 in 2021.
Additional coverage by Florence Tan; Editing by Edmund Blair
Original Source © Reuters