Meanwhile, Goldman Sachs eyes $80 oil this summer: File Image/Pixabay
Demand recovery due to the global success of the Covid vaccines was yet again the reason for oil price gains on Friday and the commodity reaching new multi-year highs.
The trigger for Friday's trading performance was the International Energy Agency in its monthly report stating that the Organization of the Petroleum Exporting Countries (OPEC) and allies would need to boost output to meet demand by the end of 2022, as all indications were the world would recover to pre-pandemic levels far sooner than expected.
The Paris-based agency stated, "OPEC+ needs to open the taps to keep the world oil markets adequately supplied," adding that "In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target."
Even the jet fuel market is showing signs of improvement
Also bolstering bullish sentiment was ANZ Research stating in a note that not only was road traffic returning to pre-Covid levels in North America and most of Europe, but "Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17 percent over the past two weeks, according to Eurocontrol,"
Accordingly, Brent on Friday settled up 17 cents at $72.69 per barrel (for the week it was up 1 percent); West Texas Intermediate settled up 62 cents at $70.91 per barrel (it was up 1.9 percent on the week).
Goldman Sachs contributed to the bullish mood on Friday by saying in a note, “Rising vaccination rates are leading to higher mobility in the U.S. and Europe, with global demand estimated up 1.5 million bpd in the last month to 96.5 million bpd."
The note went on to state that the bank expects Brent prices to reach $80 per barrel this summer.
Yet another sign of a robust market: five sources with knowledge of the matter told media on Friday that Saudi Arabia will supply full volumes of July-loading crude to its Asia customers.
And while it may be inevitable that the world is headed towards clean energy generation, Norway's petroleum and energy minister on Friday presented the government a white paper outlining how the country will meet its energy needs and reach climate goals; but instead of following the IEA's insistence that new oil, gas and coal fields need to be scrapped, the paper held firm on fossil fuels, noting that it will "facilitate a future-oriented Norwegian oil and gas industry capable of delivering production with low emissions within the framework of our climate policy.”