fundamental News - OIL
Oil prices trimmed overnight gains on Friday but were poised to end the week largely steady after rebounding from a sharp drop, underpinned by expectations supply will remain tight as demand recovers.
Brent crude futures fell 7 cents, or 0.1%, to $73.72 a barrel at
0147 GMT, after jumping 2.2% on Thursday. For the week, Brent was headed
for a 0.1% gain.
U.S. West Texas Intermediate (WTI) crude futures fell 8 cents, or
0.1%, to $71.83 a barrel, following a 2.3% gain on Thursday. WTI was set
to end the week flat.
Demand growth is expected to outpace new supply, following the
agreement by the Organization of the Petroleum Exporting Countries and
allies, known as OPEC+, to add back 400,000 barrels per day each month
from August through December.
Oil prices, along with other riskier assets, tumbled earlier in the
week on concerns about the broad economic impact of surging COVID-19
cases of the Delta variant in the United States, Britain, Japan and
elsewhere.
Benchmark contracts fell as much as $6 on Monday but have recouped
all of those losses as investors expect overall crude demand to stay
strong driven by the continued fall in oil stocks and rising rates of
vaccinations.
"With demand holding up, the market is starting to sense the
400kb/d increase in OPEC (OPEC+) will not be enough to keep the market
balanced. Inventories continue to fall, both in the U.S. and across the
OECD," ANZ Research analysts said in a note.
Analysts who have been raising price forecasts for the rest of the
year said they see rising vaccination rates limiting the impact of
surging infections of the Delta variant.
"We continue to see oil prices tracking higher in H2 2021 as oil
demand growth outpaces supply growth," Commonwealth Bank commodities
analyst Vivek Dhar said in a note. CBA sees Brent rising to $85 by the
fourth quarter.
Technical analysis
Upside is cap by the 4-hourly 200-SMA at $71.93 and support is sitting at 70.83.
expectation today: neutral