Oil prices fell for the second day in a row on Friday morning as major forecasters warned that the recovery in global demand is still fragile and as the US dollar strengthened.
Friday at 9:41 a.m. ET, WTI Crude declined 0.07 percent to $ 58.24 and prices for Brent Crude traded up slightly 0.23 percent to $ 61.33.
On Thursday, the International Energy Agency (IEA) warned that the oil market recovery looks fragile in the first quarter of 2021, although it remains optimistic that global oil supplies will decline rapidly in the second half of this year as demand increases. This year, world demand for oil is expected to grow by 5.4 million barrels per day (bpd) compared to 2020, the agency said in its closely-watched February Oil Market Report. That’s 100,000 bpd lower than projected in the January report, when the IEA expected demand to increase 5.5 million bpd year over year by 2021.
OPEC also warned Thursday of a weaker start to this year and expects oil demand to rise 5.8 million bps in 2021, down about 100,000 bps from last month’s forecast due to blockages in major developed economies in the first half of this year.
Oil prices ended their nine-day rally on Thursday – the longest streak of consecutive daily gains in two years – as the market digested warnings of weak demand in the first quarter and a growing number of analysts said technical indicators point to overbought conditions. Related: The Most Vulnerable Oil Price Hike In History
Torbjörn Törnqvist, CEO of one of the world’s largest independent oil traders, Gunvor, told Bloomberg last week that oil prices were unlikely to rise much above $ 60 a barrel as this price level would boost many oil supplies, including from the United States. .
Amrita Sen, chief oil analyst at Energy Aspects, doesn’t rule out $ 100 oil next year, but she also believes the market has taken a head start on fast fundamentals “as demand is relatively weak right now” .
Current oil price strength depends “on the continued reluctance of the OPEC + group of producers, supported by” paper “demand from speculators,” Saxo Bank said early on Friday.
By Tsvetana Paraskova for Oilprice.com
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