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Energy Today: Crude Oil Headed for Fourth Monthly Gain on Tight Supply

26 Feb 2021 8:26 am
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Mumbai (Commodities Control) - Oil prices fell on Friday as a collapse in bond prices led to gains in the U.S. dollar and expectations grew that with oil prices back above pre-pandemic levels, more supply is likely to come back to the market.

U.S. West Texas Intermediate (WTI) crude futures dropped or 0.6%, to $63.17 a barrel at 0241 GMT, giving up all of Thursday's gains.

Brent crude futures for April fell 0.3%, to $66.70 a barrel, following a 16 cent loss on Thursday. The April contract expires on Friday. The more active May contract fell 32 cents, or 0.5%, to $65.79.

However, the oil is heading for fourth monthly gains with the global market tightening as investors await the OPEC+ meeting next week, watching for any changes to production strategy following booming prices.

The recovery from the Covid-19 pandemic accelerated this year after Saudi Arabia pledged deeper output cuts, helping to push the prices.

Early indications point to differing opinions on the way forward for OPEC+, with Saudi Arabia favouring keeping supply steady while Russia favouring for supply increase.

Goldman Sachs Group Inc. is predicting Brent will move into the $70s through the next two quarters and some are even talking about $100 crude again in the longer term.

The recent cold blast that swept across parts of the U.S., including Texas, has increased the market tightening after halting millions of barrels of output.

MCX oil is forecast to showcase a positive and March contract is likely to move towards Rs. 4,700 per barrel in the short term.

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