Meanwhile, Goldman Sachs predicts $80 oil this summer: File Image/Pixabay
Crude prices on Friday recovered somewhat after the previous session's 7 percent loss due to Covid concerns in Europe, partly due to a sentiment that Thursday's sell-off was overdone.
After it was announced that Germany, France and other countries are resuming inoculations due to no evidence that the AstraZeneca vaccine poses a risk of blood clots (which earlier halted the program and contributed to a rise in infections, thus worry over demand recovery), Brent rose $1.38, or 2.1 percent, at $64.63 per barrel.
West Texas Intermediate rose $1.42, or 2 percent, to $61.45; however, prices for the week are still expected to drop by 9 percent due to the demand worries.
Patrick De Haan, head of petroleum analysis, GasBuddy
All signs are for higher demand than I think almost anyone anticipated
Phil Flynn, senior market analyst at Price Futures Group Inc., said, "The [Thursday] sell-off is going to put into motion some things that could have slowed the rally: OPEC is going to be more concerned about Covid, so this increases the odds that they will extend production cuts yet again, and with the sharp drop in the price of oil, it might reduce the incentive of the U.S. shale producers to get ahead of their skis."
Goldman Sachs said European Union demand and record Iran supply would slow the oil market rebalancing by 750,000 barrels per day (bpd) in the second quarter, but it expected that the Organization of the Petroleum Exporting Countries and allies would reduce output to offset the impact of those issues.
Goldman also expects a significant increase in global oil demand in the coming months and Brent to reach $80 per barrel this summer.
Meanwhile in the U.S. where over 100 million people have been vaccinated as of Friday and Covid are dropping steadily, gasoline demand is approaching normal levels for March, causing Patrick De Haan, head of petroleum analysis at GasBuddy, to remark, "It's still March, meaning as the economy recovers and we get closer to summer, all signs are for higher demand than I think almost anyone anticipated just a few months ago."
Amrita Sen, chief oil analyst at Energy Aspects, on Friday said "oil prices will go up" as the pace of domestic and international travel rises: she added that Thursday's correction was "a blip" and that eventually international travel - which comprises the bulk of airline activity - will rebound.