Oil gains on its third week, supported by OPEC output cuts

Oil prices gained in early trade on Friday, nearing its third week of gains as it was supported by key producers’ compliance with the agreed output cuts amid concerns about fuel demand recovery during the pandemic.

Brent crude futures climbed 0.4%, or 16 cents, at $44.07 per barrel. U.S. West Texas Intermediate crude futures were up 0.2%, or 8 cents, at $42.90 per barrel.

Both benchmarks fell nearly 1% on Thursday after weekly U.S. unemployment claims were reported to be higher than expected.

Meanwhile, OPEC+ is ensuring the compliance of all major producers to the agreed cuts after several members were flagged in a meeting on Wednesday. Some members who failed to comply with the cuts would need to slash production by 2.31 million bpd to compensate for the oversupply.

According to an internal report, OPEC+ forecasts global oil demand to fall by 9.1 million bpd, 100,000 bpd more than previously predicted.

Studies also suggest that demand could drop by 11.2 million bpd in 2020 if the second wave of infections in many parts of the world prolonged.