By Peter Nurse
By 6:30 AM ET, U.S. crude was up 0.4% at $70.59 a barrel, a day after their highest close since October 2018. Brent Oil Futures was up 0.2% at $72.63, a day after closing at the highest since May 2019.
U.S. Gasoline RBOB Futures were down 0.8% at $2.1945 a gallon.
Earlier Friday, the International Energy Agency stated, in its monthly report, that the world will need a lot more oil from the group of top producers, known as OPEC+, as global demand is on track to return to pre-pandemic levels at the end of next year.
“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based energy watchdog said, adding “in 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target.”
The Organization of the Petroleum Exporting Countries stuck to its forecast of a strong recovery in global oil demand in the second half of 2021, led by the United States and China, in its monthly report Thursday.
“The demand recovery that OPEC is forecasting later this year does suggest that we will need to see some considerable production increases from the group over 2H21,” said analysts at ING, in a note.
OPEC+ agreed in April to gradually ease oil output cuts from May to July and confirmed the decision at a meeting last week.
These string crude prices are set to continue this year, with the influential U.S. investment bank Goldman Sachs (NYSE:GS) expecting Brent crude prices to reach $80 per barrel this summer.
“Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 mb/d (million barrels per day) in the last month to 96.5 mb/d,” the bank said in a note released late on Thursday.
Later Friday, traders will focus on the latest weekly update from Baker Hughes of the number of oil rigs, while the CFTC will release its weekly commitments of traders report.