Oil Poised for Third Weekly Gain on Improving Demand Outlook

  • Bloomberg
  • Commodities News
Oil Poised for Third Weekly Gain on Improving Demand Outlook
Credit: © Reuters.

(Bloomberg) -- Oil is poised to eke out a third weekly gain after bouncing around $70 a barrel this week as investors digested varying demand signs.

Futures in New York were steady on Friday after closing at the highest since October 2018 in the previous session. OPEC predicted that the global demand recovery will gather strength in the second half of the year, while traffic on U.S. roads and most of Europe was pretty much back to pre-virus levels.

See also: OPEC+ Spare Oil Buffer Is Not All It Seems as Demand Roars Back

Oil topped $70 a barrel this week for the first time in more than two years, but U.S. data signaling a large increase in gasoline stockpiles and slowing demand took some of the heat out of the market. Still, the weekly figures are unlikely to derail a broader global recovery, with the International Energy Agency scheduled to give an updated snapshot on the market later Friday.

Progress in talks to revive a nuclear deal between Iran and world powers continues to be keenly watched, with a top U.S. envoy appealing to Tehran to accept a “mutual return” to the 2015 accord.

The market is firming in a bullish structure. The prompt timespread for Brent was 55 cents in backwardation -- where near-dated prices are more expensive than later-dated ones. That compares with 38 cents on Monday (NASDAQ: MNDY ).

Oil demand will jump by about 5 million barrels a day -- or roughly 5% -- in the second half of 2021 compared with the first half, according to a report from OPEC on Thursday. The estimates were little changed from a month ago.

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