Global crude oil prices have slipped but stayed near $70 a barrel as the decision to maintain output cuts by major producers has controlled supply with support due to optimism over demand recovery in the second half of 2021.

Brent crude futures for May dropped by $0.17, or 0.2%, to reach $69.46 a barrel while the US West Texas Intermediate crude for April slipped by $0.23, or 0.4%, to $65.79 a barrel, reported Reuters.

According to the news agency, front-month Brent is expected to witness weekly gains, after reaching   a 13-month high on 8 March following attacks on oil facilities in Saudi Arabia.

Additionally, the decision made earlier this month by the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to maintain production cuts in April supported price gains.

Investors are putting funds into commodities with the anticipation of recovery of crude oil demand in the second half of the year.

This is due to the expected improved economic outlook driven by the wider rollout of Covid-19 vaccines.

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By GlobalData

FGE analysts were cited by the news agency as saying: “Assuming vaccination programmes are successful, we expect pent-up demand for gasoline to be released this summer during the US and European driving season.”

Last week, gasoline stocks in the US saw a large dip following the winter storm in Texas that affected refining output.

However, OPEC expects the oil demand recovery will be focused on the second half of the year.