Oil futures traded mixed early on Friday, with US oil making slight gains while the international benchmark Brent declined on concerns over growing supply and a weakening appetite for energy amid the global cases of COVID in particular increased in Europe, Brazil and India.
West Texas Intermediate Crude Oil for delivery in May
rose 2 cents or less than 0.1% to $ 59.62 a barrel on the New York Mercantile Exchange after falling 0.3% Thursday.
Global benchmark June Brent crude oil
However, ICE Futures Europe fell 4 cents or less than 0.1% to $ 63.16 a barrel on ICE Futures Europe after the contract rose 0.1% a day ago.
Energy markets are grappling with signs of increasing coronavirus cases in Europe, particularly as members of the Organization of Petroleum Exporting Countries and their allies recently agreed in a meeting to slowly lift production restrictions.
OPEC +, which also includes Russia, agreed to gradually increase its supply by 2 million barrels a day between May and July.
Energy traders expect demand to be strong in the second half of 2021, but questions about COVID variants and issues with the AstraZeneca vaccine have raised some questions about how quickly an economic recovery will materialize.
"Still, the conflicting signals surrounding OPEC + care are coming back on the market amid rising coronavirus cases, along with reports linking the UK vaccine horse [COVID-19] to higher blood clot incidence keep the cops in check, "he wrote to Stephen Innes, chief strategist for global markets at Axi, in a daily note.
For the week, WTI expects a weekly drop of nearly 3%, while Brent posted a weekly drop of 2.6% based on the most active contract.
On Thursday, market participants blamed an above-expected weekly increase in US gasoline inventories for the weakness in oil futures stocks.
The Energy Information Administration reported Wednesday that gasoline supplies rose 4 million barrels, while distillate supplies rose 1.5 million barrels for the week. IHS Markit had forecast a weekly supply increase of 200,000 barrels for gasoline and 500,000 barrels for distillates.