Oil outlook brightens as prices near $56 on rising demand

Though oil prices opened the week lower, there are expectations Friday that they are on course for weekly gains, the third in a row in the case of Brent as the cleanup after hurricane in the United States gathers pace and the outlook for demand rise.

Specifically, Brent crude futures were at $55.24 a barrel early in the week just as they hit $55.99 Thursday.

Indeed, Bob Dudley, BP Chief Executive, is reported to have said oil prices were likely to stay up to $60 as major producers kept output restricted, just as the Organisation of the Petroleum Exporting Countries (OPEC) this week forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its production-cutting deal with non- member countries is helping to tackle a supply glut.

OPEC’s forecast was followed by the IEA saying the global oil glut was shrinking, thanks to strong European and U.S. demands as well as production declines in OPEC and non-OPEC countries.

U.S. West Texas Intermediate crude was above $50 on hitting a four-month high and finished 1.2 per cent higher at $49.89 dollars, the highest since July 31.

In other markets, typically safe haven assets like the Yen and gold were higher after North Korea fired off yet another missile in breach of United Nations sanctions amid high regional tensions over its nuclear weapons programme.