Oil prices fell on Friday morning for the second day in a row, as major analysts warned that the recovery in global demand is still fragile and with the strengthening of the US dollar.
As of 9:51 am ET on Friday, WTI Crude fell 0.07 percent to $ 58.24 and Brent Crude prices traded slightly above 0.23 percent at $ 61.33.
On Thursday, the International Energy Agency (IEA) warned that the rebalancing of the oil market appears fragile in the first quarter of 2021, although it remains optimistic that global oil stocks will fall rapidly in the second half of this year, with the increase demand. This year, world oil demand is expected to grow 5.4 million barrels per day (bpd) compared to 2020, the agency said in its February Oil Market Report. That is 100,000 bpd below the projection in the January report, when the IEA expected demand to increase 5.5 million bpd year after year in 2021.
OPEC also warned on Thursday of a weaker start for this year, and expects oil demand to rise 5.8 million bpd in 2021, down about 100,000 bpd from last month’s projection due to blockages in the main developed economies in the first half of this year.
Oil prices ended their nine-day recovery on Thursday – the longest streak of consecutive daily gains in two years – with the market digesting weak first-quarter alerts and an increasing number of analysts saying technical indicators point to overbought conditions. Related: The Most Fragile Oil Price Rally in History
Torbjörn Törnqvist, chief executive of one of the world’s largest independent oil traders, Gunvor, told Bloomberg last week that oil prices should not rise much above the $ 60 a barrel mark, considering that price level would greatly encourage the supply of oil, including from the United States.
Amrita Sen, chief oil analyst at Energy Aspects, does not rule out $ 100 oil next year, but she also believes that in terms of immediate fundamentals, the market has outperformed itself, “because demand is still relatively weak now” .
The current strength of the oil price depends “on the continued restraint of the OPEC + producer group, supported by speculators'” paper “demand,” Saxo Bank said Friday morning.
By Tsvetana Paraskova for Oilprice.com
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