Oil prices were lower on Friday but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone.
US West Texas Intermediate crude was down 17 cents or 0.4 per cent at $49.72 a barrel at 0620 GMT. It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2 per cent higher at $49.89, its highest close since July 31.
Brent crude futures were down 23 cents or 0.4 per cent at $55.24 a barrel. They gained 0.6 per cent to settle at $55.47 in the previous session, the highest close since April 13.
Nevertheless, US crude is on track for a nearly 5 per cent gain this week, buoyed by the return of refineries after Hurricane Harvey and stronger indications of demand. Brent is heading for a 2.7 per cent gain and a third consecutive weekly rise.
“Front-month Brent is at a premium against forward months. This shows how strong demand is for immediate delivery,” said Bob Takai, president at Sumitomo Corp Global Research in Tokyo. "This is what OPEC has been wanting to see for many months and a good sign that crude market is getting out of glut.”
The Organization of the Petroleum Exporting Countries (OPEC) this week forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its production-cutting deal with non-member countries is helping to tackle a supply glut.
That was followed by the IEA saying the global oil glut was shrinking thanks to strong European and US demand, as well as production declines in OPEC and non-OPEC countries.
BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 as major producers kept output restricted.
In other markets, typically safe haven assets like the yen and gold were higher, after North Korea fired off yet another missile in breach of United Nations sanctions, amid high regional tensions over its nuclear weapons programme.