Oil prices were set for a weekly gain early on Friday, capping a week of several days of gains that saw both benchmarks rebound to above $40 a barrel.
This week’s sentiment on the market has been more bullish than the previous week, when fears of waning demand recovery had overtaken the news cycle and a sell-off sent oil prices to below $40 a barrel.
This week started with OPEC and the International Energy Agency (IEA) revising down their respective demand outlooks for this year due to a more fragile outlook on economic recovery amid the continued uncertainty about the pandemic.
But the inventory draw in U.S. crude oil stocks sent oil prices higher late on Tuesday and through Wednesday, while platform evacuations in the Gulf of Mexico ahead of Hurricane Sally also supported prices in the middle of the week.
On Thursday, market participants turned to the meeting of the OPEC+ panel, at which Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, called out laggards in compliance for trying to “outsmart the market” and lashed out at oil traders and speculators, saying “I’m going to make sure whoever gambles on this market will be ouching like hell”.
Oil prices rose on Thursday for a third consecutive day, after Prince Abdulaziz bin Salman chafed at the non-compliant members of the OPEC+ pact that now include the United Arab Emirates (UAE), which has been a staunch partner of the Saudis in sticking to their share of the cuts until last month.
On Friday, oil prices were struggling for direction in the morning as the bullish momentum from the previous days was dampened by Libyan General Khalifa Haftar saying that he would lift for one month the blockade on Libya’s oil production and exports.
Commenting on oil prices, John Hardy, Head of FX Strategy at Saxo Bank, said on Friday:
“We see this bounce as being short-lived with lack of demand, not laggards and short sellers being the reason why oil for the foreseeable future is likely to remain stuck in the low $40’s.”
By Tsvetana Paraskova for Oilprice.com
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