Oil Price Fundamental Daily Forecast – Weak Outlook as Series of Bearish Factors Outweigh Limited Bullish News

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Friday on the thought that the sell-off earlier in the week may have been a bit overdone and as concerns over lower crude production in Libya offset expectations that rising coronavirus cases in India and Japan would cause energy demand to decline.

At 12:07 GMT, June WTI crude oil is trading $61.57, up $0.14 or +0.23% and June Brent crude oil is at $65.41, up $0.01 or +0.02%.

Bullish News

Libya said its oil production fell to about 1 million barrels per day in recent days and could drop further due to budgetary issues.

Flash purchasing managers’ index numbers for April came in better than expected in the Euro Zone and supported the view that the region’s economic recovery is accelerating.

Bearish News

India, the world’s third-largest oil user, on Thursday reported the world’s highest daily increase to date with 314,835 new coronavirus cases.

Indian Oil Corp Ltd’s refineries are operating at about 95% of their capacity, down from 100% at the same time last month, two sources familiar with the matter told Reuters.

Japan, the world’s No. 4 oil importer, is expected to announce a third wave of lockdowns affecting Tokyo and three western prefectures, media reported.

Progress on talks between Iran and world powers to resurrect the 2015 nuclear accord is also putting some pressure on prices. Analysts estimate that Iran has the potential to provide about 1-2 million barrels per day (bpd) in additional oil supply if a deal is struck.

Don’t forget about OPEC+. The group plans to bring back about 2 million bpd of production over the next three months.

Daily Forecast

Longer-term bearish factors are also starting to creep into the market as oil demand is expected to take a hit as more countries adopt policies to combat climate change.

According to Reuters, the United States and other countries hiked their targets for slashing greenhouse gas emissions at a global climate summit hosted by President Joe Biden, an event meant to resurrect U.S. leadership in the fight against global warming.

Biden unveiled the goal to cut emissions by 50%-52% from 2005 levels. Japan nearly doubled its target for cutting carbon emissions to 46% by 2030.

Crude oil traders could react to today’s U.S. Flash Manufacturing PMI report. It is expected to show the economic recovery is accelerating. Traders expect a reading of 60.9, up form 59.1.

For a look at all of today’s economic events, check out our economic calendar.