Oil prices slipped on Friday but were set for their third weekly rise on expectations of a recovery in fuel demand in Europe, China and the United States as rising vaccination rates lead to an easing of pandemic curbs.
Brent crude futures edged down 4 cents, or 0.06%, to $72.48 a barrel to 0658 GMT, after closing at its highest since May 2019 on Thursday.
U.S. West Texas Intermediate (WTI) crude futures also slipped 4 cents, or 0.06%, to $70.25 a barrel, after climbing 0.5% on Thursday to its highest close since October 2018.
Brent is set for a weekly rise of 0.8% while WTI is set to gain 0.9%.
U.S. investment bank Goldman Sachs (NYSE:GS) expects Brent crude prices to reach $80 per barrel this summer, betting that a recent oil market rally will continue as vaccination rollouts boost global economic activity and demand for the commodity.
Saudi Arabia, the world's top oil exporter, will supply full volumes of July-loading crude to its Asian customers, Reuters reported on Friday citing sources.
"News that Saudi Arabia has unwound all its voluntary production cuts are circulating in Asia today, and that appears to have temporarily pushed oil prices lower," Jeffrey Halley, senior market analyst at OANDA, wrote in a note.
"The reaction is modest, though, and if anything, the price action is bullish. It suggests that the physical market has absorbed extra Saudi production with ease and that demand globally is robust and climbing."
Gasoline inventories in the United States, the world's biggest oil consumer, rose by 7 million barrels in the week to June 4, and distillate stockpiles rose by 4.4 million barrels, both much more than analysts had expected, according to data from the U.S. Energy Information Administration on Wednesday. [EIA/S]
That unexpected surge spurred profit-taking as prices hit a two-and-half year high, said Margaret Yang, a strategist at DailyFX.
Additionally, data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.
"Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol," ANZ analysts said.
The Organization of the Petroleum Exporting Countries (OPEC) reinforced the view of healthy demand, sticking to its forecast that demand in 2021 would rise by 5.95 million barrels per day, up 6.6% from a year earlier.
Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half," OPEC said in its monthly report on Thursday.