Yemisi Izuora
Oil prices rose on Friday, heading for a fourth straight week of gains, amid more evidence that fuel demand is recovering as countries ease business and social restrictions that were imposed to counter the COVID-19.
Brent crude was up 14 cents, or 0.4 per cent, at $36.20 a barrel after gaining nearly 1 per cent on Thursday. The contract is heading for a jump of more than 10 per cent for the week.
The West Texas Intermediate crude was up 5 cents, or 0.2 per cent, at $33.97 a barrel, having gained more than 1 per cent in the last session. The US benchmark is on track for a weekly jump of around 15 per cent.
The lifting of some coronavirus curbs is driving a recovery in gasoline demand with traffic congestion in some of the world’s capitals returning to year-earlier levels, data prepared for Reuters shows.
Traffic flows in Berlin and Tokyo have seen a rebound, according to the data, while in the United States the easing of restrictions in many states has supported demand for gasoline. The upcoming Memorial Day holiday weekend typically kicks off the US summer driving season.
“While the vacations outlook remains an open-ended question, a degree of summer driving will be salvaged compared to (the level it would have been at) had US states delayed relaxing lockdown policies,” RBC Capital Markets said in a note.
US inventories also fell this week against expectations of rise, suggesting the overall supply overhang in the market is clearing.
Meanwhile oil exports from the Organization of Petroleum Exporting Countries, OPEC+ Russia and other allies have fallen by about 6 million barrels per day (bpd), according to companies that track oil flows. [nL8N2D243W]
That suggests broad compliance with a deal struck by members of the OPEC+ grouping to cut supply by a record 9.7 million bpd from this month in an effort to support prices.