By Barani Krishnan
Investing.com – Oil prices eked out a second week of gains thanks to the U.S. Energy Information Administration’s estimates of unexpectedly strong crude draws at home despite the International Energy Agency forecasting a weaker global outlook for fuels amid the Covid-19 outbreak.
And while a new wave of the pandemic across the world generates enough concern about the immediate demand for energy, oil bulls can expect more price support in the coming week from another old friend: OPEC+.
A panel of the Saudi-steered and Russia-assisted Organization of the Petroleum Exporting Countries will meet Wednesday to review the market amid efforts to roll back some two million barrels from production cuts of around 9.6 million barrels per day agreed to in May.
“OPEC+ will try to stay nimble until they have a better trajectory of the global crude demand recovery,” said Ed Moya, analyst at New York’s OANDA.
At Friday’s settlement, New York-traded , the benchmark for U.S. crude futures, was down 23 cents, or 0.5%, at $ 42.01 per barrel.
For the week, WTI rose 72 cents, or 1.7%, adding to the previous week’s 2.4%.
London-traded , the bellwether for global crude prices, closed the New York session down 16 cents, or 0.4%, at $ 44.80.
On a weekly basis, Brent gained 46 cents, or 1%.
The Energy Information Administration reported in its weekly data set on Wednesday that U.S. crude stocks drew down 4.5 million barrels for the week ended Aug 7, versus market expectations for a decline of 2.9 million. Despite a new wave of the Covid-19 virus having impacted business performance in most U.S. states since July, the agency has persistently estimated outsize crude draws over the past three weeks, to the tune of 22 million barrels that has led to skepticism from some traders at least.
The International Energy Agency, meanwhile, forecasts a worldwide demand drop of 8.1 million barrels per day for oil in 2020 — despite the global coronavirus situation being a lot less worse than in the United States.
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