Oil heads for second weekly gain on tighter supply outlook
RoydadNaft – Oil prices extended gains on Friday and were on course for a second weekly gain, supported by geopolitical tensions in the Middle East, concerns over tightening supply and expectations about demand growth as economies improve.
Brent crude was up 36 cents, or 0.4%, to $91.01 a barrel by 1031 GMT. U.S. West Texas Intermediate crude was at $86.79 a barrel, up 20 cents, or 0.2%.
On Thursday both benchmarks settled at their highest level since October.
“The market knows that some kind of retaliation from Iran is likely, but it doesn’t know any details which creates a great discomfort and nervousness,” SEB analyst Bjarne Schieldrop said.
Israel has not claimed responsibility for the attack on Iran’s embassy compound in Syria on Monday.
“Further clampdowns on adherence to quotas should see output fall further in Q2,” ANZ analysts Daniel Hynes and Soni Kumari wrote in a note.
“The prospect of a tighter market should see a drawdown in inventories during the second quarter.”
This comes amid solid global oil demand growth of 1.4 million barrels per day (bpd) in the first quarter, JPMorgan analysts wrote in a note.
“Our high-frequency demand indicators estimate that total oil consumption in March averaged 101.2 million bpd, 100,000 bpd above our published estimates,” they said.
