Oil holds near $67, heads for weekly gain on demand hopes

LONDON: Oil held near $67 a barrel on Friday and was heading for a weekly gain as a stronger demand outlook and signs of economic recovery in China and the United States offset rising COVID-19 infections in some other major economies.

China's first-quarter gross domestic product jumped 18.3% year on year, official data showed on Friday. On Thursday figures showed a rise in US retail sales and a drop in unemployment claims.

"Given the improving outlook for the world's two biggest economies, there is little chance of the market's feel-good glow being extinguished any time soon," said Stephen Brennock of oil broker PVM.

Brent crude was down 8 cents, or 0.1%, at $66.86 a barrel at 1340 GMT. It was heading for a weekly gain of 6.2% after rising in the past four sessions. US West Texas Intermediate (WTI) crude fell 10 cents, or 0.2%, to $63.36.

New US sanctions imposed on Russia, one of the world's top oil producers, over alleged election interference and hacking could also support prices.

"Though they do not affect the oil sector directly, they could lead to higher financing costs and general uncertainty in trade with Russia," said Eugen Weinberg of Commerzbank.

Helping the rally this week, the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) both made upward revisions to oil demand growth forecasts for 2021.

Figures on Wednesday also showed US crude inventories fell by 5.9 million barrels.

Demand hopes offset concern about rising coronavirus cases in other big economies. India's infection rate hit a record high while Germany's chancellor on Friday said a third wave of the virus had the country in its grip.

Oil has recovered from pandemic-induced lows last year, helped by record cuts to oil output by OPEC and its allies, a group known as OPEC+.

Some of the OPEC+ cuts will be eased from May and the group meets on April 28 to consider further tweaks to the supply pact.