Oil prices fell on Friday morning for the second day in a row as major forecasts warned that the recovery in global demand is still fragile as the US dollar strengthens.
At 9:51 a.m. ET on Friday, WTI Crude was down 0.07 percent to $ 58.24, and Brent Brut prices traded slightly down 0.23 percent to $ 61.33.
On Thursday, the International Energy Agency (IEA) warned that rebalancing the oil market appears fragile in the first quarter of 2021, although it remains optimistic that global oil stocks will decline rapidly in the second half of this year, as demand will grow. This year, global oil demand is expected to grow by 5.4 million barrels per day (bpd) compared to 2020, the agency said in its February oil market report. This is 100,000 bpd lower than the projection in the January report, when the AIE expected demand to increase by 5.5 million bpd per year in 2021.
OPEC also warned on Thursday of a weaker start to this year and expects oil demand to rise by 5.8 million bpd in 2021, down by 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 rally on Thursday – the longest series of consecutive daily gains in two years – as the market digested first-quarter weak demand warnings and as a growing number of analysts said technical indicators indicate 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 were unlikely to rise well above the $ 60 a barrel mark, considering that this price level would stimulate a lot of oil supply, including from the United States.
Amrita Sen, chief oil analyst at Energy Aspects, does not rule out $ 100 worth of oil next year, but also believes that in terms of prompt fundamentals, the market has come to terms with it, “because right now demand is still relatively weak ”.
The current strength of the oil price is dependent “on the continued hold on the part of the OPEC + producer group supported by the demand for” paper “from speculators,” Saxo Bank said early on Friday.
By Tsvetana Paraskova for Oilprice.com
More top readings from Oilprice.com: