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Oil futures lost ground Thursday, putting major benchmarks on track to end an extended run of gains.
West Texas Intermediate crude for March delivery CL.1, -0.27% CLH21, -0.27%, the U.S. benchmark, fell 35 cents, or 0.6%, to $58.33 a barrel on the New York Mercantile Exchange. WTI has gained ground for eight straight sessions.
April Brent crude BRN00, -0.33% BRNJ21, -0.33%, the global benchmark, was off 41 cents, or 0.7%, at $61.06 a barrel on ICE Futures Europe, threatening to end a nine-day winning streak.
Crude has rallied to start 2021, with WTI up 11.8% for the year to date and Brent up nearly 11%. Gains have been attributed to optimism over the rollout of COVID-19 vaccines and, more recently, to expectations Congress will enact a round of additional relief spending closer in size to President Joe Biden’s $1.9 trillion proposal to boost the economic recovery.
At the same time, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, have largely stuck to output curbs. In addition, Saudi Arabia unilaterally cut production by 1 million barrels a day for February and March.
“In view of the many restrictions, the U.S. oil market overall is in a good state” wrote analysts at Commerzbank, in a Thursday note. “In our opinion, however, the price-supportive factors are already sufficiently reflected in today’s high prices, meaning that even a slight increase in risk perception among investors should put oil prices back under pressure.”
Oil remained weaker after OPEC in its monthly report early Thursday, trimmed its forecast for a rebound in global oil demand this year. OPEC said it expects oil demand to rise by 5.8 million barrels a day in 2021, down 100,000 barrels a day from its January forecast, to average 96.1 million barrels a day.
Earlier, the International Energy Agency, in its monthly report, said that a recovery in demand will outstrip rising output in the second half of the year to prompt “a rapid stock draw” of the glut of crude built up since the outbreak of the coronavirus.
