(Bloomberg) -- Oil held its losses in Asia after weak U.S. economic data cast doubt on the prospects for a demand recovery even as OPEC+ prepares to taper output cuts starting next month.
Futures in New York were down 0.1%, after retreating 1.1% on Thursday, although the market is still up 0.5% on the week. U.S. Labor Department figures showed the number of Americans filing for unemployment barely dropped last week, signaling the labor-market recovery is stalling as coronavirus cases surge around the country. Texas and Florida both reported record numbers of virus deaths.
OPEC+ plans to add at least 1 million barrels a day of output to the market in August after almost three months of historic curbs to ease the impact of the pandemic. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said he was confident the extra supply would be easily absorbed by the market as demand recovers.
Others are less convinced by the strength of the pick-up in consumption. The pace of oil-demand improvements is starting to slow, driven by a sharp pullback in the U.S., according to Goldman Sachs Group Inc (NYSE:GS).
Read: Oil Demand Pick-Up Recedes With Virus Proving Tough to Shake
Despite the uncertain outlook, a Chevron (NYSE:CVX) Corp-owned oil terminal in southern Louisiana is gearing up to export crude oil into the global market. The Empire site will export Mars Blend, a crude that can easily offset production OPEC+ and its allies have cut to stabilize the market.
There are still pockets of strength in parts of the physical market. North Sea contracts are trading in their tightest structure in five months, highly sulfurous crudes are firmer and the futures curve has rallied.
Citigroup (NYSE:C) raised its third-quarter forecast for Brent futures by $4 to $43 a barrel and also boosted its WTI crude price outlook. The bank said that it sees a “move to deep backwardation” in both Brent and WTI and is constructive on oil prices for the second half of the year.
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