Brent crude oil prices declined on Friday, but hover around $ 70 a barrel due to the supply constraints from major oil producers and optimism that demand will recover in the second half of the year.
Brent crude futures for May slipped 11 cents, or 0.2%, to $69.52 a barrel by 0403 GMT while West Texas Intermediate (WTI) crude for April was at $65.83 a barrel, down 19 cents, or 0.3%.
Front-month Brent is expected to announce weekly earnings for the eighth week after hitting a 13-month high on Monday, following attacks on Saudi Arabian oil facilities.
Sensitivity has increased when the Organization of Petroleum Exporting Countries (OPEC) and its allies decided to make major production cuts earlier this month in April.
Broader vaccination practices against the COVID-19 pandemic are expected to allow more people to travel this summer, as investors pump money on commodities such as oil in anticipation of a recovery in demand in the second half of the year as the global economy grows.
If vaccination programs are successful, demand for gasoline is expected to increase during the US and European driving season this summer. This will undoubtedly support the entire oil complex, this summer and beyond.
OPEC said on Thursday that the recovery in oil demand will focus on the second half of the year.
In the United States, the world’s largest oil consumer, US gasoline inventories fell sharply as the winter storm in Texas interrupted refining production last week.
The high oil prices are expected to drive US producers to increase production. At current prices, it is economical for most US onshore operators. It encourages a wide range of operators, from large public companies to private players, to increase operations in 2021 and to create a solid momentum for higher volumes in 2022.
