Oil prices dip, but remain on track for strong weekly gains
Tokyo — Oil prices were lower in thin trading on Friday — but remained on course for weekly gains, the third in a row in the case of Brent.
The clean-up after hurricanes in the US has gathered pace and the outlook for demand has taken on a firmer tone.
US West Texas Intermediate crude was down 21c or 0.4% at $49.68 a barrel at 3.02am GMT.
It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2% higher at $49.89, its highest close since July 31.
Brent crude futures were down 29c or 0.5% at $55.18 a barrel. They gained 0.6% to settle at $55.47 the previous session, the highest close since April 13.
Nevertheless, US crude is on track for a nearly 5% gain this week, buoyed by the return of refineries after Hurricane Harvey and stronger indications of demand.
Brent is heading for a 2.6% gain and a third consecutive weekly rise.
"Front-month Brent is at a premium against forward months. This shows how strong demand is for immediate delivery," said Bob Takai, president at Sumitomo Global Research in Tokyo.
"This is what [oil cartel] Opec has been wanting to see for many months and a good sign that crude market is getting out of glut."
The Organisation of the Petroleum Exporting Countries this week forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its production-cutting deal with non-member countries is helping to tackle a supply glut.
That was followed by the International Energy Agency (IEA) saying the global oil glut was shrinking thanks to strong European and US demand, as well as production declines in Opec and non-Opec countries.
BP CEO Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 as major producers kept output restricted.
In other markets, typically safe-haven assets like the yen and gold were higher, after North Korea fired off yet another missile in breach of United Nations sanctions, amid high regional tensions over its nuclear weapons programme.