Oil steady near four-week highs on demand revival

By Sonali Paul
MELBOURNE, April 16 (Reuters) - Oil prices dipped in early
trade on Friday but were on course for a weekly gain of more
than 6% with an improved oil demand outlook and strong economic
recoveries in China and the United States offsetting concerns
about spikes in COVID-19 infections.
Brent crude LCOc1 futures fell 17 cents, or 0.3%, to
$66.77 a barrel at 0052 GMT, following a 36 cent rise on
Thursday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were
down 19 cents, or 0.3%, to $63.27 a barrel, after climbing 31
cents on Thursday.
Strong economic recoveries around the world and supply curbs
by OPEC and its allies, together called OPEC+, as well as a
cautious response to higher prices by U.S. oil producers are
supporting the market, said Westpac senior economist Justin
Smirk.
"We still think there's a clear risk prices could rise up to
$70 a barrel before we see a more meaningful pull back," Smirk
said.
He said the longer prices stay elevated, the more supply is
likely to return to the market, and the risks of COVID-19 cases
spiking in places like India and Europe could eventually drive
prices down.
For the moment, a strong jump in U.S. retail sales, a drop
in unemployment claims and signs of more cars on the road in the
world's biggest economy buoyed the market.
"The reopening of the (U.S.) economy has already seen
traffic levels increase in various states across the nation,"
ANZ analysts said in a note, adding that India and China are
also showing "high levels of congestion".
Traders are looking ahead to a pick-up in traffic typical in
the United States in June through August.
"With miles driven on the U.S. highways up for the first
time since the pandemic outbreak, it means we are well on the
way to a bountiful U.S. summer driving season that could come
close to matching the summer of 2019," Axi chief global market
strategist Stephen Innes said in a note.