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Oil fell as OPEC cuts demand forecast

by Bunkerist
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Oil prices dropped for the second day on Friday. It fell from a one-year high after OPEC lowered its demand forecast again and the International Energy Agency said there was a surplus in the market.

Brent crude was down 39 cents, or 0.6% at $60.75 a barrel by 0743 GMT, having dropped half a percent the previous session. WTI oil was down 44 cents, or 0.8% at $57.80 a barrel, after falling by 0.8% on Thursday.

Both indicators closed on Wednesday at their highest levels since January 2020 after nearly record-breaking consecutive daily gains.

Oil prices have risen in the past few weeks, with producers in the group known as OPEC and OPEC + lowering production and Saudi Arabia promising additional unilateral cuts.

OPEC production will likely drop this month, due to declines in Saudi Arabia and Libya. This situation deepens the global market deficit and supports prices.

The relative strength index of US crude oil is said to be at the highest purchased level since the second Iraq war.

The Organization of Petroleum Exporting Countries (OPEC) says worldwide oil demand will recover slower than expected in 2021. The International Energy Agency (IEA) said that although COVID-19 vaccines are expected to help improve demand, oil supply still surpasses global demand.

U.S. crude inventories fell unexpectedly last week, with refineries pushing production up to pre-epidemic levels, according to the Energy Information Administration.

Still, gasoline inventories rose more than expected, up 4.3 million barrels last week, despite forecasts of a 1.8 million increase. Gasoline demand in the past four weeks is 10% below the same time last year.

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