Crude oil prices moved higher on Friday, rebounding from early losses, as tensions in the Middle East raised possibilities of disruptions in crude supplies.
Prices dropped early on in the session, weighed down by a report from OPEC that lowered demand forecast, and the International Energy Agency’s remarks that the re-balancing of the global oil markets remains “fragile.”
West Texas Intermediate Crude oil futures for March ended up $1.23 or about 2.1% at $59.47 a barrel, recovering well from an early low or $57.41 a barrel.
OPEC said in its February Oil Market Report that oil demand will likely rise by 5.8 million barrels per day this year, down by around 100,000 bpd from last month’s projection due to extended lockdowns and the re-introduction of partial lockdowns in a number of countries.
The International Energy Agency said in its latest monthly report that the market was still over-supplied, although Covid-19 vaccines are expected to help demand recover in the second half of this year.
A report from Baker Hughes said the number of active U.S. rigs drilling for oil increased by 7 to 306 this week. With this, the rig count has risen for 11 straight weeks. The total rig count was up by 5 at 397, the report said.