Oil rebounds towards $81
Oil rebounded towards $81 a barrel on Friday as an equities rally lent support, though prices pared gains after a closely watched forecaster deemed supply adequate and the outlook for demand weakening.
Crude was still heading for its first weekly drop in five weeks, pressured by a big rise in US inventories and fading concerns for now about looming US sanctions aimed at cutting Iran's oil exports.
Global equities were set for their biggest daily gain in nearly a month. Declining equities amid wider risk-off investor sentiment had pressured oil on Thursday.
“A rebound in equity markets would help Brent to rebound from $80,” said Petromatrix analyst Olivier Jakob, adding that a dip below $80 on Thursday did not clearly break that level as a source of technical support.
International benchmark Brent crude rose 65 cents to $80.91 a barrel by 1328 GMT, having dropped by 3.4 per cent on Thursday. US crude added 79 cents to $71.76.
Still, the monthly report by the International Energy Agency (IEA) on Friday weighed. The IEA said the market looked ”adequately supplied for now” and trimmed its forecasts for world oil demand growth this year and next.
“This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data,” said the IEA, which advises industrialised countries on energy policy.
The IEA report is the latest government assessment to predict weaker demand ahead and conclude that supply is adequate.