By Gina Lee
Investing.com – Oil was mixed Friday morning in Asia but is on track to record a weekly gain of more than 6%. The improving global oil demand outlook as both the U.S. and China continue to make progress in their recoveries, gave the black liquid a boost and played a part in offsetting concerns about the ever-rising number of global COVID-19 cases.
The strong global economic recoveries, supply curbs by the Organization of the Petroleum Exporting Countries and allies (OPEC+) and a cautious response to higher prices by U.S. oil producers boosted the market, Westpac senior economist Justin Smirk told Reuters.
“We still think there’s a clear risk prices could rise up to $70 a barrel before we see a more meaningful pull back,”; the longer prices stay elevated, the more supply is likely to return to the market and the risks of COVID-19 cases spiking in places like India and Europe could eventually drive prices down, he added.
Better-than-expected economic data from the U.S. on Thursday, including a drop in initial jobless claims and a higher-than-expected growth in March’s retail sales month-on-month, also boosted investor sentiment. China will also release data including GDP and industrial production figures, later in the day.
“The reopening of the (U.S.) economy has already seen traffic levels increase in various states across the nation,” ANZ analysts said in a note, adding that India and China are also showing “high levels of congestion”.
Investors are also looking to the start of the U.S. driving season, which runs from June through August, for a pickup in traffic numbers.
“With miles driven on the U.S. highways up for the first time since the pandemic outbreak, it means we are well on the way to a bountiful U.S. summer driving season that could come close to matching the summer of 2019,” Axi chief global market strategist Stephen Innes said in a note.
Oil Mixed But Nears 6% Weekly Gain as Fuel Demand Optimism Grows
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