Oil prices on Friday continued to fall following the forecast of a weak recovery in transportation fuels for the first half of the year from the Organization of Petroleum Exporting Countries' (OPEC) and with the International Energy Agency's (IEA) caution over low oil demand.
International benchmark Brent crude was trading at $60.73 per barrel at 0606 GMT for a 0.67% decrease after closing Thursday at $61.14 a barrel.
American benchmark West Texas Intermediate (WTI) was at $57.81 a barrel at the same time for a 0.74% fall after ending the previous session at $58.24 per barrel.
Despite the immediate success of the vaccine rollouts, OPEC said in its OPEC Monthly Oil Market Report on Thursday that the positive outlook was offset by expectations of a weaker recovery in transportation fuels in the first half of the year, as COVID-19 infection cases remain high in many regions, including the US, Europe and Latin America.
The group noted that this has led to governments imposing new lockdown measures, or deepening existing ones, to help control the spread of the virus. It said the majority of the economic impacts from any positive developments would only gain traction during the second half of the year.
In its monthly oil report, the IEA also expressed caution on the first quarter’s oil demand outlook due to the expected impact of the new COVID-19 variants, particularly on mobility.
However, the ongoing production cuts of more than 1 million barrels per day by Saudi-led OPEC and non-OPEC countries are limiting further declines amid a pandemic-driven supply glut and low demand.
With Saudi Arabia's voluntary reduction, the production cut of OPEC+ will reach 8.125 million barrels per day (bpd) this month and 8.05 million bpd in March, thus reducing output in February by 925,000 bpd and 850,000 bpd in March relative to output rates in January.