# U.S. oil benchmark threatens to snap 8-day winning streak

“The downside risk to that outlook remains a key source of concern,” he said, with the International Energy Agency (IEA) offering the latest warning that the current recovery remains fragile.

West Texas Intermediate crude for March delivery
CL.1,
-0.63%

CLH21,
-0.63%,
the U.S. benchmark, fell 35 cents, or 0.6%, to $58.33 a barrel on the New York Mercantile Exchange. WTI had gained ground in each of the last eight sessions.

April Brent crude
BRN00,
-0.44%

BRNJ21,
-0.44%,
the global benchmark, was off 22 cents, or 0.4%, at $61.25 a barrel on ICE Futures Europe, threatening to end a nine-day winning streak.

Early Thursday in a monthly report, the Organization of the Petroleum Exporting Countries trimmed its forecast for a rebound in global oil demand this year. OPEC said it expects appetite for crude to rise by 5.8 million barrels a day in 2021, down 100,000 barrels a day from its January forecast, to average 96.1 million barrels a day. 

Earlier, the IEA, in its own monthly report, said that a recovery in demand will outstrip rising output in the second half of the year to prompt “a rapid stock draw” of the glut of crude built up since the outbreak of the coronavirus.

However, the IEA said it remains “cautious about the outlook for oil demand” in the first quarter, in part due to new COVID variants, and has downwardly revised its first quarter forecast by 100,000 barrels per day, with demand now expected to decline by 110,000 barrels per day year-over-year, to 93.7 million barrels per day.

Earlier this week, the Energy Information Administration said in a monthly report that it expects global consumption of petroleum and liquid fuels to rise by 5.4 million barrels per day in 2021. That forecast was down 200,000 barrels from the January forecast.

Petroleum product prices also headed lower Thursday, with March gasoline
RBH21,
-0.27%
down 0.3% at $1.6483 a gallon and March heating oil
HOH21,
-0.74%
losing 0.8% at $1.7473 a gallon.

Still, crude has rallied to start 2021, with WTI and Brent both up over 11% year to date. Gains have been attributed to optimism over the rollout of COVID-19 vaccines and, more recently, to expectations Congress will enact a round of additional relief spending closer in size to President Joe Biden’s $1.9 trillion proposal to boost the economic recovery.

At the same time, OPEC and its allies, a group known as OPEC+, have largely stuck to output curbs. In addition, Saudi Arabia unilaterally cut production by 1 million barrels a day for February and March.

“In view of the many restrictions, the U.S. oil market overall is in a good state” wrote analysts at Commerzbank, in a Thursday note. “In our opinion, however, the price-supportive factors are already sufficiently reflected in today’s high prices, meaning that even a slight increase in risk perception among investors should put oil prices back under pressure.”

Also on Nymex Thursday, prices for natural gas headed lower after Wednesday’s gain of nearly 3%.

The U.S. Energy Information Administration reported on Thursday that domestic supplies of natural gas declined by 171 billion cubic feet for the week ended Feb. 5. On average, the data were expected to show a drop of 175 billion cubic feet for the week, according to analysts polled by S&P Global Platts.

March natural gas
NGH21,
-1.58%
fell 1.3% to $2.873 per million British thermal units.