Oil Holds Gains Near $66 With Signs Fuel Consumption Expanding

Oil held gains near $66 a barrel in early Asian trading amid signs a recovery in fuel consumption is accelerating and after the U.S. enacted a massive pandemic relief program that lifted markets in general.

Futures in New York were steady after advancing 2.5% on Thursday, the most in almost a week. Vehicle miles driven on American highways increased 10% last week from the previous seven days, while U.K. road use has also been rising. The passing of the $1.9 trillion stimulus deal will see aid flowing to millions of individuals, businesses and local governments as early as this weekend.

The Organization of Petroleum Exporting Countries, meanwhile, sounded a note of caution in the demand outlook on Thursday, trimming its estimates for the amount of crude it will need to pump over the next two quarters.

Oil has whipsawed this week and briefly rallied to the highest since October 2018 on Monday following an attack on a key Saudi Arabian facility, but prices have since pulled back and are poised for a modest weekly loss. The market continues to tighten due to output cuts from OPEC+ members, however, and the rollout of Covid-19 vaccines is spurring optimism over the demand outlook.

See also: OPEC’s Shock Move to Tighten Market Leaves Oil World Divided

The prompt timespread for Brent was 63 cents a barrel in backwardation on Thursday — a bullish market structure where near-dated prices are more expensive than later-dated ones — compared with 54 cents a week earlier.