By Geoffrey Smith
Investing.com -- Crude oil prices edged lower on Friday as doubts about a U.S. fiscal stimulus package clouded an otherwise upbeat outlook for global demand.
By 11:30 AM ET (1630 GMT), U.S. crude futures were down 0.3% at $46.66 a barrel, while Brent futures, the international benchmark, was down 0.4% at $50.04. Despite slipping from its earlier highs, Brent is on course to end the week above $50 a barrel for the first time since February.
U.S. Gasoline RBOB Futures were down 0.9% at $1.3048 a gallon.
Helping that recovery, over the last week, have been ever clearer signs of a pickup in European demand as the continent’s struggle with Covid-19 started to reap rewards of lower case loads and slightly more relaxed restrictions on businesses and households. Even so, the situation remains volatile, with France on Thursday extending its night-time curfew over the New Year period and the U.K. edging nearer to putting the capital, London, under the most restrictive of its bands. In the U.S. meanwhile, the Department of Homeland Security said it will extend restrictions on non-essential travel across the border with Mexico and Canada through January 21.
“The very fact that prices broke the 50-dollar ceiling this week is positive for the market,” said Paola Rodriguez-Masiu, senior oil market analyst with Rystad Energy, in emailed comments. “The market has been in a low-price reality for a while, so even if some gains are trimmed today, looking at the weekly performance and at the overall trend, oil is in a much better position than earlier in the year and optimism has returned for the future.”
Even so, she warned that the global market is likely to remain oversupplied in the first quarter of next year, as the pandemic continues to plague northern hemisphere markets.
It remains unclear as to whether the recovery in prices will feed through into higher U.S. output next year, given the sharp tightening of access to capital for much of the shale patch. Light, sweet U.S. oil is also particularly affected by the return of Libyan crude, which has largely displaced it from European markets as the North African country has brought back over 1 million barrels a day of production in the wake of a peace accord.
Baker Hughes is due to report its weekly oil rig count later, while the CFTC will release its weekly estimate of speculative net positions in crude futures.