MELBOURNE: Oil prices slipped on Friday (Jun 11) but were set for their third weekly rise on expectations for 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 fell 23 cents, or 0.3 per cent, to US$72.29 a barrel at 0145GMT, reversing most of Thursday's climb to its highest close since May 2019.
US West Texas Intermediate (WTI) crude futures slipped 22 cents, or 0.3 per cent, to US$70.07 a barrel, after climbing 0.5 per cent on Thursday to its highest close since October 2018.
Brent is set for a gain of 0.5 per cent this week while WTI is set to climb 0.6 per cent.
"If you take the week, we've certainly seen prices lift on some demand hopes, but it was mixed," said Commonwealth Bank commodities analyst Vivek Dhar.
"The US stockpile data didn't paint a good picture. We saw gasoline and distillate stockpiles really surge. Towards the end of the week that was a dampener on the spirits," he said.
The US Energy Information Administration reported on Wednesday that gasoline inventories rose by 7 million barrels in the week to Jun 4, and distillate stockpiles rose by 4.4 million barrels, both much more than analysts had expected.
However, 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 per cent 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 per cent 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.