Oil Rising, Heading Towards Weekly Increase, in Light of Hopes of a Recovery in Fuel Demand

Oil prices rose, and is on track to achieve gains for the second week in light of the growing confidence that demand for fuel has started to rise despite the Coronavirus pandemic that is ravaging economies around the world.

Before the Tokyo Stock Exchange closed, Brent crude rose 14 cents, or 0.3%, to $ 45.10 a barrel, heading towards a gain of 1.6% this week.

US West Texas Intermediate crude gained 11 cents, or 0.3%, to $ 42.35 a barrel. US crude is heading towards a 3% gain this week.

Prices were boosted this week by US government data showing that stocks of crude oil, gasoline and distillates decreased last week, as refiners intensified production and improved demand for petroleum products.

But the International Energy Agency lowered its forecast for oil demand for the current year, and said that the decline in air travel due to the Covid-19 pandemic would reduce global oil consumption this year by 8.1 million barrels per day.

The Organization of the Petroleum Exporting Countries (OPEC) said earlier this week that global oil demand will likely drop by 9.06 million barrels per day this year, a decline that exceeds the drop of 8.95 million barrels per day the organization had expected a month ago.

OPEC and allies including Russia, in what is known as the OPEC + group, have cut production since May by about 10% of global demand to address the repercussions of the global health crisis.

Meanwhile, Russian Energy Minister Alexander Novak said he did not expect quick decisions on production cuts when an OPEC + oversight committee meets next week, Russian news agencies reported on Thursday.