Oil prices fell on Friday, but were set to post strong gains for the week, with demand rising faster than supply, while vaccinations soften the impact of a resurgence of coronavirus cases in the world.
Brent crude futures for September, which expire Friday, fell 45 cents, or 0.6%, to $ 75.60 a barrel at 0506 GMT, after jumping 1.75% on Thursday.
The most active Brent contract for October was down 48 cents, or 0.6%, to $ 74.62 a barrel.
US West Texas Intermediate (WTI) crude futures fell 43 cents, or 0.6%, to $ 73.19 a barrel, reducing a 1.7% rise from Thursday.
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Both benchmark contracts were heading for gains of around 2% for the week, supported by indications of tight crude supplies and strong demand in the United States, the world’s largest consumer of oil.
“We’ve had stronger prices for a little longer now because it’s a fundamental supply and demand issue in terms of a pick-up in demand that we’re seeing in places like the United States,” Justin said. Smirk, Senior Economist at Westpac.
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U.S. crude and gasoline inventories have fallen sharply over the past week, with crude inventories at Cushing at their lowest since January 2020, reflecting strong growth in demand. ANZ analysts noted that even jet fuel consumption in the country reached its highest level since March 2020.
Even with the increase in coronavirus cases in the United States, across Asia and parts of Europe, analysts said rising vaccination rates would limit the need for the severe lockdowns that have ravaged the country. asks at the height of the pandemic last year.
“I think the risks of the big closures that we saw last year are much lower,” Smirk said.
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Analysts point to a rapid rebound in India’s gasoline consumption and industrial production following the COVID-19 outbreak earlier this year, a sign that economies are more resilient to the pandemic.
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“Yes, Delta is a risk, but will it derail demand growth in the second half of the year? We may not see it, ”said Vivek Dhar, commodities analyst at the Commonwealth Bank.
(Reporting by Sonali Paul; Editing by Christopher Cushing)