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Brent crude slips, but stays near $70 as demand recovery hopes lend support

Published 03/12/2021, 09:49 AM
Updated 03/12/2021, 09:50 AM
© Reuters.
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By Florence Tan
SINGAPORE, March 12 (Reuters) - Brent crude prices eased on
Friday but hovered near $70 a barrel as production cuts by major
oil producers constrained supply, with optimism about a recovery
in demand for the resource in the second half of the year also
lending support.
Brent crude futures LCOc1 for May slipped 17 cents, or
0.2%, to $69.46 a barrel by 0109 GMT while U.S. West Texas
Intermediate crude CLc1 for April was at $65.79 a barrel, down
23 cents, or 0.4%.
Front-month Brent is on track to post weekly gains for the
eighth week after touching a 13-month high on Monday following
attacks on Saudi Arabian oil facilities.
Sentiment was also buoyed by the decision of the
Organization of Petroleum Exporting Countries (OPEC) and its
allies, a group known as OPEC+, earlier this month to largely
hold production cuts in April. Investors have been pumping funds into commodities such as
oil on expectations of a demand recovery in the second half of
the year as the global economy grows while a wider rollout of
vaccines against the COVID-19 pandemic allows more people to
travel this summer.
"Assuming vaccination programmes are successful, we expect
pent-up demand for gasoline to be released this summer during
the U.S. and European driving season," FGE analysts said in a
note.
RBC Capital analysts said the fundamentals for summer
gasoline is the most bullish in nearly a decade.
"We think this will support the entire oil complex this
summer and beyond."
The United States, world's largest oil consumer, saw a
massive draw on U.S. gasoline stocks last week as the winter
storm in Texas disrupted refining output. EIA/S
OPEC said on Thursday a recovery in oil demand will be
focused on the second half of the year.

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