By Gina Lee
Investing.com – Oil was down Friday morning in Asia, but still headed towards a weekly gain as signs of strengthening U.S. and China demand raised fuel demand hopes.
Brent oil futures were down 0.56% to $67.67 by 12:56 AM ET (4:56 AM GMT) and WTI futures fell 0.69% to $64.56.
Major cities in the U.S. are moving towards a full re-open, with New York City aiming to do so in July 2021. In Asia, a weeklong holiday in China beginning Saturday is expected to see travel numbers hit record highs.
However, the COVID-19 shadow has not completely lifted, as countries such as India, the world’s third-largest oil importer, and Brazil continue to see a record number of cases. The Organization of the Petroleum Exporting Countries and allies (OPEC+) also issued a warning earlier in the week that surging COVID-19 cases could derail fuel demand.
“This week saw an avalanche of strong data and reassuring developments in the U.S, but that may have buried the rising global risk of more transmissible Covid variants, particularly the one that has wreaked havoc in India... at six-week highs, crude was ripe for a breather,” Vanda (NASDAQ:VNDA) Insights founder Vandana Hari told Bloomberg.
OPEC+ added to a slew of bullish calls on the outlook issued throughout the week by raising its consumption estimates for 2021. Goldman Sachs Group Inc. (NYSE:GS) forecasted oil demand will post a record jump COVID-19 vaccination rates increase.
On the supply side, the cartel is set to ease its current production curbs from May onwards, and other short-term risks to the demand outlook are starting to become visible. The Middle Eastern Dubai benchmark’s structure flipped to a slight contango on Thursday, indicating that market tightness may be easing.