(Bloomberg) -- Oil headed for a weekly gain on further signs that demand is picking up as the world emerges from coronavirus lockdown.
Futures in New York were little changed, after gaining 2.3% on Thursday, and are up about 7% this week. Top trading houses Vitol SA and Trafigura Group said global oil demand is recovering rapidly from its historic nadir. They cautioned, however, that a potential resurgence of the virus is clouding the long-term outlook. China is battling its worst outbreak since Wuhan, while in the U.S., Florida’s new cases rose faster than the past week’s average and Texas hospitalizations climbed for a record seventh day.
U.S. gasoline futures for prompt delivery traded at a premium to the second month contract for the first time in three months on Thursday, in a positive sign that drivers are returning to the roads ahead of the summer holiday season.
U.S. benchmark crude has failed to close above $40 a barrel since early March, despite improving consumption. A stubborn supply glut has capped gains, with higher prices prompting some shale producers to restart wells just weeks after shutting them. Oklahoma City-based Continental Resources (NYSE:CLR) Inc., chaired by billionaire Harold Hamm, said Thursday it will start bringing back some of its shut-in oil production in July but will keep about 50% of output curtailed.
OPEC+ held an online meeting on Thursday finalizing an accord reached in principle earlier this month. Habitual quota cheat Iraq said that it will implement its oil-production cuts in full this month and agreed on the details of how to compensate for falling short of its target in May.
Read: OPEC+ Cuts Push Total Into Rare North Sea Oil Shopping Spree
After piling into oil like never before, retail investors are starting to pull back. Traders on Wednesday withdrew $205 million from 12 of the world’s most-watched exchange-traded funds that bet on the price of oil increasing, according to Bloomberg calculations. That’s the biggest collective withdrawal in just under two years.
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