Oil prices rose on Friday on hopes of a fuel demand recovery in the United States and Europe as economic growth picks up and lockdowns ease, but worries about India’s raging second wave of COVID-19 cases kept a lid on gains.
Brent crude futures rose 1.09%, or 71 cents, to settle at $66.11 per barrel. U.S. West Texas Intermediate (WTI) crude futures settled 1.16%, or 71 cents, higher at $62.14 per barrel.
“The market shrugged off last week’s (U.S. oil) inventory build, instead comforted by the continued improvement in gasoline demand,” ANZ analysts said in a note.
U.S. refiner Valero said gasoline and diesel demand were back to 93% and 100% of the levels they were at before the pandemic, with chief commercial officer Gary Simmons saying the company is “pretty bullish on gasoline going forward”.
Improving conditions in Europe also buoyed sentiment. France said schools would reopen on Monday and domestic travel curbs in place since early April restricting people to within 10 km (6 miles) of their homes would end on May 3.
“With the COVID headline shockers from India and Japan fading to the back burner and so far no related risk of mutations spilling back into the U.S. and Europe, (the) buy-in dip has remained the order of the day,” said Axi’s chief market strategist Stephen Innes.
Nevertheless, both benchmark crude contracts are headed for a weekly loss of nearly 2% on concerns about sliding fuel demand in India, the world’s third largest oil importer, where daily infections and deaths from COVID-19 hit new records this week.
Several countries, including Australia, Britain, Canada, and the United Arab Emirates, have barred or cut flights from India.