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Oil Loses more Steam after OPEC Reduced Demand Forecast

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Oil prices dropped for a second day on Friday, pulling further back from a oneyear high after OPEC again lowered its demand forecast and the International Energy Agency said the market was still oversupplied.

Brent crude was down 39 cents, or 0.6 at 60.75 a barrel by 0743 GMT, having dropped half a percent the previous session. U.S. oil was down 44 cents, or 0.8 at 57.80 a barrel, after falling by 0.8 on Thursday.

Both benchmarks closed on Wednesday at their highest levels since January 2020 after a nearly recordsetting run of consecutive daily gains.

Oil prices have risen over the last few weeks as OPEC and other producers in the group known as OPEC cut production, while Saudi Arabia also promised unilateral reductions in output that started this month.

OPEC production is likely to fall this month led by declines in Saudi Arabia and Libya. This should deepen the global market deficit and support prices, said Capital Economics.

Before the declines, U.S. crudes relative strength index was at the most overbought level since the second Iraq war, said Bob Yawger, director of energy futures at Mizuho Securities.

There are some signs that the market is setting up for a pullback, he said.

Oil demand around the world in 2021 will recover more slowly than earlier thought, the Organization of the Petroleum Exporting Countries OPEC said.

Previously, the International Energy Agency IEA said oil supply was still outstripping demand globally, although COVID19 vaccines are…

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