Oil Down, But Closes Week Near $70 Mark Over Fuel Demand Recovery Hopes By

© Reuters.

By Gina Lee – Oil was down Friday morning in Asia. The black liquid gave up some gains from the previous session even as investors cheered the last step of the U.S.’ stimulus package that drove fuel demand recovery hopes up.

inched down 0.07% to $69.47 by 8:59 PM ET (01:59 AM GMT) and were down 0.32% to $65.81.

U.S. President Joe Biden on Thursday, a day after the House of Representatives gave its final approval to the bill.

Investors also remained optimistic as the advent of spring saw more cars on the road. Vehicle miles driven on American highways reportedly increased 10% during the past week from the previous seven days, while U.K. road use also increased.

The Organization of Petroleum Exporting Countries (OPEC), however, struck a cautious note about demand outlook on Thursday, as it lowered estimates for crude that it will need to pump over the next two quarters.

However, the decision made by OPEC and its allies (OPEC+) earlier in the month to continue current output cuts also continues to tighten the market, and the global COVID-19 vaccine rollout continues to drive optimism over fuel demand recovery.

“Assuming vaccination programs are successful, we expect pent-up demand for gasoline to be released this summer during the U.S. and European driving season,” FGE analysts said in a note.

Oil is closing what has been a volatile week, with prices rallying to their highest point since October 2018 on Monday after the attack on a Saudi Arabian facility. Prices pulled back as the week progressed, however, and are poised to post a modest weekly loss.

The prompt timespread for Brent futures was 63 cents a barrel in backwardation on Thursday, compared with 54 cents during the previous week.

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