Oil approached $ 70 a barrel on Friday, backed by the optimism of major oil producers’ disciplined production cuts and a recovery in demand in the second half of the year.
Benchmark Brent settled down 41 cents, or 0.6%, to $69.22 a barrel. U.S. West Texas Intermediate crude also ended down 41 cents to $65.61 a barrel.
Brent and U.S. crude ended the week roughly flat after prices touched a 13-month high on Monday, following seven straight weeks of gains.
With the US stimulus package and a daily stream of optimistic vaccine headlines, demand for risky assets like Oil continues to pick up.
The Organization of Petroleum Exporting Countries and its allies, which decided to maintain production limits almost unchanged last week, predict stronger demand for oil in the second half of the year.
US drillers are reducing the number of oil and gas rigs operating for the first time since November.
The strong recovery expected in the second half of this year means an indication for the global economy and therefore oil demand is close to shedding COVID troubles. Gasoline foundations for the next summer season are at the highest level of growth in nearly a decade.
In US, the world’s largest oil consumer, last week’s winter storm at texas interrupted the production of refined products, while the US gasoline stocks had a huge withdrawn.
U.S. oil output is expected to average 11.36 million barrels per day this year compared with 11.32 million bpd in 2020.
Earlier this week, the government revised down 2021’s decline expected in U.S. crude production. Output is seen falling 160,000 bpd to 11.15 million bpd, a smaller decrease than its previous monthly forecast for a 290,000-bpd drop.
