Oil futures were trading mixed early Friday, with U.S. oil showing slight gains while the international benchmark Brent edged lower, amid concerns about growing supply and weakening appetite for energy as global cases of COVID rise in Europe, Brazil and India in particular.
West Texas Intermediate crude for May delivery
CL.1,
Global benchmark June Brent crude
BRN00,
Energy markets have been wrestling with signs of increasing spikes of coronavirus cases in Europe in particular even as members of the Organization of the Petroleum Exporting Countries and its allies in a recent meeting have agreed to slowly unwind output curbs.
OPEC+, which includes Russia, agreed to gradually increase supplies by 2 million barrels a day between May and July.
Energy traders are anticipating that demand will be strong in the second half of 2021 but questions about COVID variants and troubles with the AstraZeneca vaccine have raised some questions about how quickly an economic rebound will take hold.
“Still, the conflicting signals around OPEC+ supply coming back to market amid spiking coronavirus case numbers…together with reports linking the UK’s [COVID-19] vaccine workhorse to the higher frequency of blood clots, continues to hold the bulls at bay,” wrote Stephen Innes, chief global markets strategist at Axi, in a daily note.
For the week, WTI is headed for a weekly decline of nearly 3%, while Brent was on track for a weekly slide of 2.6%, based on the most-active contract.
On Thursday, market participants blamed a bigger-than-expected weekly increase in U.S. gasoline stocks for softness in values for oil futures.
The Energy Information Administration on Wednesday reported that gasoline supply was up by 4 million barrels, while distillate stockpiles climbed 1.5 million barrels for the week. IHS Markit had forecast weekly supply increases of 200,000 barrels for gasoline and 500,000 barrels for distillates.
