Oil Set for 2nd Weekly Gain Near $50 as Demand Seen Speeding Up
Oil headed for a second weekly advance on forecasts for accelerating crude demand and as U.S. Gulf Coast refineries continued to recover from Hurricane Harvey.
Futures were little changed in New York, up 4.7 percent this week, after trading above $50 a barrel on Thursday for the first time in five weeks. OPEC and the International Energy Agency boosted demand forecasts, signaling the surplus that has weighed on prices may shrink further. U.S. refiners are resuming operations after Harvey halted almost a quarter of the nation’s capacity.
While oil has rebounded the past two weeks, prices have struggled to hold above $50 a barrel this year as rising U.S. output stifles supply curbs led by members of the Organization of Petroleum Exporting Countries. The group and its allies are said to be discussing extending those cuts past the end of March by more than three months as the global glut drains slower than expected.
“Oil fundamentals have been favorable in lifting oil,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore. He forecasts New York crude will climb to $55 a barrel by the end of the year. “Prices have risen extensively and some profit-taking may occur. Recovery in the Gulf following Harvey has already been priced in and markets have moved on.”
West Texas Intermediate for October delivery was at $49.70 a barrel on the New York Mercantile Exchange, down 19 cents, at 7:40 a.m. in London. Total volume traded was about 41 percent below the 100-day average. Prices rose 59 cents, or 1.2 percent, to close at $49.89 on Thursday, the highest since July 31. The contract climbed as high as $50.50 during intraday trade.