WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand

WEEKLY ENERGY RECAP: Oil prices extend weekly gains amid signs of improving global demand

Despite mixed signals from the International Energy Agency (IEA) oil monthly report, prices extended weekly gains and rose to the highest level in more than 13 months on signs that the global market is tightening and demand is improving. On the week's closing, Brent crude price breached the $60 mark and closed the week higher at $62. 43 a barrel. The West Texas Intermediate (WTI) crude price also extended its rally and closed the week higher at $59. 47 a barrel. Although the IEA warned of a fragile outlook for oil demand recovery during the first half of 2021 and lowered its demand outlook in light of coronavirus challenges, it expects a rapid drawdown of global inventories in the second half. This was a bit confusing to the market as the IEA reported that the latest data for OECD oil stocks (December 2020) fell for the fifth consecutive month, recording a huge monthly decline of 44. 6 million barrels to 138. 3 million barrels above the five-year average. OECD inventories have been steadily declining since the third quarter last year. Though the IEA gave bearish oil demand recovery signals for the first half of the year that weighed heavily on