Oil heads for weekly gain

Oil is set for its first weekly gain in almost two months after dovish signals from the Federal Reserve on Wednesday sent markets higher. Global benchmark Brent was trading below $77 a barrel after rising more than 4% in the previous two sessions, while U.S. crude traded above $71. Treasuries rose and the dollar weakened after Fed Chairman Jerome Powell said policymakers were now focused on when to cut borrowing costs. A softer dollar is boosting the appeal of commodities priced in foreign currencies. The rally came after seven straight weeks of declines that brought futures to their lowest level since June ahead of the Fed meeting. Rising exports from non-OPEC countries including the U.S. and concerns about a weakening demand outlook are weighing on prices, while there are also doubts about whether all OPEC members will commit to deeper voluntary cuts. Kotak Securities Ltd in Mumbai “Despite the recent recovery, crude oil prices remain relatively close to recent lows as global demand and supply balances soften,” Ravindra Rao, head of commodity research, said. “Despite the recent OPEC+ output cuts, expectations of rising non-OPEC supply led by the US could act as a restraining factor on further price gains.” The International Energy Agency on Thursday extended its bearish outlook by cutting its forecast for global oil demand growth this quarter by almost 400,000 bpd as economic activity weakened. The Paris-based consumer body continues to expect growth to nearly halve next year to around 1.1 million bpd.