After sharp weekly beneficial properties, oil costs slip as coronavirus gloom persists By Reuters

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© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a Department of Energy tour of the Strategic Petroleum Reserve in Freeport, Texas, the United States, June 9, 2016. REUTERS / Richard Carson

By Roslan Khasawneh

SINGAPORE (Reuters) – Oil prices fell Friday as concerns about the patchy adoption of COVID-19 vaccinations around the world dampened optimism about the recovery in fuel demand.

fell 13 cents, or 0.2%, to $ 71.18 a barrel by 0504 GMT after falling 4 cents Thursday after rising to its highest level since May 2019. The contract is on track to gain over 2% this week.

US oil fell 10 cents, or 0.2%, to $ 68.71 after falling 2 cents in the previous session while heading for a gain of nearly 4% this week.

“The upward momentum seems to be exhausted and making room for profit-taking. But I expect the withdrawal will be modest as the broader portrayal of a strong US economic recovery and oil demand is firmly entrenched, ”said Vandana Hari. Energy analyst at Vanda (NASDAQ 🙂 Insights.

Both contracts soared about $ 5 each in the past two weeks amid optimism that global fuel demand is recovering from the depths of the pandemic.

“We continue to view the recovery in oil demand largely as a function of vaccinations,” JPMorgan Chase (NYSE 🙂 commodity analysts said in a press release.

“America and Europe are well advanced in their vaccination efforts,” noted analysts, but the slow adoption of vaccination in developed and emerging Asian countries alike means that “there is no clear end in sight to social distancing restrictions in the region.”

More than 170 million people have contracted the virus worldwide, while the death toll approaches 3.8 million as the second year of the worst global health crisis in a century shows no signs of an end anytime soon.

Prices rose earlier this week as the Organization of Petroleum Exporting Countries (OPEC) and its allies in the grouping known as OPEC + forecast that demand will exceed supply in the second half of 2021. OPEC + agreed on Tuesday to continue supply restrictions through July and lift prices.

The slow progress of the nuclear talks with Iran is also expected to provide air for demand to catch up before Iranian oil returns to the market if an agreement is reached.

But the slow adoption of vaccines and high levels of infection in countries like Brazil and India are hurting the demand outlook in the world’s high-growth markets for crude oil and refined products.

Meanwhile, inventories fell more than forecast last week, despite fuel stocks rising, suggesting that demand for finished products is not in line with refining performance. [EIA/S]

“After digesting the big news and data of the week on the EIA, OPEC + and Iran fronts, the complex is likely to start tracking sentiment in the broader financial markets again. said Hari.

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