London — Oil hovered near $70 a barrel on Friday, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year.

Benchmark Brent rose 3c, or 0.04%, to $69.66 a barrel by 10.58am GMT while US West Texas Intermediate (WTI) crude was at $66.03 a barrel, up 1c, or 0.02%. Both recovered from losses earlier in the session during Asian trade.

Brent is set for its eighth straight week of gains after prices touched a 13-month high on Monday.

Oil cartel Opec forecast a stronger oil demand recovery this year, weighted to the second half. Opec, Russia and its allies (Opec+) decided last week to maintain its output curbs almost unchanged.

“The stronger-than-expected rebound in the second half of this year implies that the global economy and thus the oil demand outlook is close to shaking off its Covid-19 woes,” PVM analysts said.

RBC Capital analysts said the fundamentals for summer petrol was the most bullish in nearly a decade.

The US, world’s largest oil consumer, saw a big draw on US petrol stocks last week as the winter storm in Texas disrupted refining output.

Sustained higher oil prices are expected to encourage US producers to increase output, which could eventually weigh on prices, JPMorgan analysts wrote.

JPMorgan expects US oil output to average 11.36-million bpd this year compared with 11.32-million bpd in 2020.

Commerzbank expects oil to ease to about $60 during 2021.



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