* Prices heading for 3rd weekly gain
* Chinese refinery demand for crude rebounds in April
(Updates prices)
By Ahmad Ghaddar
LONDON, May 15 (Reuters) - Oil prices touched a one and a
half month high on Friday amid signs demand for crude was
picking up, with China reporting increased refinery runs and
rounding out a week of bullish news on the supply front.
West Texas Intermediate (WTI) oil was up $1.06, or 3.85%, at
$28.62 a barrel at 1347 GMT, after reaching $28.89, its highest
since early April. WTI jumped 9% in the previous session.
Brent crude LCOc1 was up 59 cents, or 1.9% at $31.72 a
barrel, after touching $32.50, the highest since April 13. Brent
rose nearly 7% on Thursday.
Both contracts are on track for a third consecutive week of
gains.
"Further signs of demand recovery together with deepening
production cuts from OPEC+ as well as shut-ins and natural
declines by non-OPEC+ is helping oil prices to recover," Bjarne
Schieldrop, chief SEB commodities analyst, said.
Amid supply cuts by the Organization of the Petroleum
Exporting Countries (OPEC) and other major producers, bright
spots are also emerging on the demand side. Data released on
Friday showed China's daily crude oil use rebounded in April as
refineries ramped up operations.
The market mood remains less than euphoric, though, with the
coronavirus pandemic far from over and new clusters emerging in
some countries where lockdowns have been eased.
"Oil prices have been up significantly since yesterday
thanks to a better assessment of the situation by the
International Energy Agency (IEA)," Commerzbank said in a note.
The IEA expects global crude inventories to fall by about
5.5 million barrels per day (bpd) in the second half of this
year. It also expects oil demand this year to fall by 8.6 million
bpd, which is a smaller decline - by 690,000 bpd - than it
forecast last month. It expects non-OPEC supply to fall by 3.2
million bpd.
Barclays raised its forecasts for Brent and WTI by $5-$6 a
barrel for 2020 and by $16 a barrel for 2021. It now sees Brent
prices averaging $37 a barrel and WTI at $33 this year. For
2021, the bank expects Brent and WTI prices to average $53 and
$50 per barrel, respectively. "The sheer size and speed of the disruption and associated
inventory overhang will take time to get fully absorbed, in our
view," Barclays analyst Amarpreet Singh said in a note.
Meanwhile U.S. crude inventories fell unexpectedly for the
first time since January, the Energy Information Administration
said on Wednesday. EIA/S
On the production side, record cuts of nearly 10 million bpd
by OPEC and associated producers - collectively known as OPEC+ -
have kicked in for May and June, with producers Saudi Arabia,
Kuwait, and the UAE pledging to cut beyond their commitments.
Oman said on Friday that it is considering cutting output
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CHART: Brent oil may retreat to $30.44 before rising
U.S. oil may rise to $28.92 changes in petroleum stocks in the U.S. https://tmsnrt.rs/3fMVOzX
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