By Geoffrey Smith
Investing.com -- Crude oil prices drifted gently upward on Tuesday as senior oil industry figures gave broadly positive outlooks for the market at a closely-watched industry conference, two days before the world’s biggest producers set their output quotas for April.
By 11:30 AM ET (1630 GMT), U.S. crude futures were up 0.2% at $6x.xx a barrel, while Brent crude, the global benchmark, was up 0.3% at $6x.xx a barrel.
Amin Nasser and Sultan Ahmed Al Jaber, the chief executives of the Saudi Arabian and Abu Dhabi national oil companies, both said they expected crude oil demand to recover more or less to its pre-pandemic level by the end of this year.
That represents an increase of some 4-5 million barrels a day from current levels, and a strong end to a year whose early months remain very much in the shadow of Covid-19.
“"I see the demand and market continuing to improve from here, especially for the second half of this year,” newswires reported Nasser as saying.
The two were speaking as technical experts from OPEC met to prepare their analysis of the oil market outlook ahead of Thursday’s ministerial meeting. OPEC and others led by Russia have to decide whether or not the sharp rise in crude prices over recent weeks justify an immediate rise in production. India’s government has already appealed to OPEC not to let prices go too high and choke off a still-fragile recovery in one of the world’s largest oil importers.
“The encouraging global economic developments and resilient demand in Asia are upside factors,” OPEC Secretary General Mohammed Barkindo said as he opened the meeting, although he added that the persisting pandemic still meant there were downside risks and so there was only cause for cautious optimism.
The World Health Organization had warned on Monday that global cases of Covid-19 rose for the first time in nearly two months last week, due to aggressive new mutations of the virus and the lifting of some restrictions on life by various governments.
The gradual easing of lockdown measures in the U.S. is, however, supporting oil demand locally. According to preliminary data from Pay with GasBuddy, analyst Patrick DeHaan said U.S. gasoline demand rose 6.6% from a week earlier, the highest Monday since late December, and 9% above the rolling four week average for Monday.
U.S. gasoline RBOB futures were up 0.6%, at $1.9540 a gallon.
At 4:30 PM ET, the American Petroleum Institute will release its weekly estimate of U.S. crude and product stockpiles as usual. Analysts expect a weekly draw of 1.85 million barrels in crude inventories.