Oil prices declined on Friday, but are set for the third weekly gain on hopes of a fuel demand rally in the U.S., China and Europe as Covid restrictions continue to ease.

Brent crude futures dropped 16 cents, or 0.22%, to $72.36 a barrel, Reuters reports, after closing on Thursday at the highest point since May 2019.

In addition, U.S. West Texas Intermediate (WTI) crude futures declined 9 cents, or 0.13%, to $70.20 a barrel, following a 0.5% rise on Thursday, the highest since October 2018.

Brent is on track for a weekly gain of 0.7% while WTI is forecast to gain 0.8%.

The world’s largest oil exporter, Saudi Arabia will supply full volumes of July-loading crude to customers in Asia, as reported by Reuters on Friday.

Jeffrey Halley, senior market analyst at OANDA said of the move: "News that Saudi Arabia has unwound all its voluntary production cuts are circulating in Asia today, and that appears to have temporarily pushed oil prices lower.

"The reaction is modest, though, and if anything, the price action is bullish. It suggests that the physical market has absorbed extra Saudi production with ease and that demand globally is robust and climbing,” he added.

Moreover, gasoline inventories in the U.S. increased by 7 million barrels in the week to 4 June, whilst distillate stockpiles edged up by 4.4 million barrels, as per data from the U.S. Energy Information Administration earlier this week.

The healthy demand forecast was bolstered by OPEC, who maintains that demand this year would increase by 5.95 million barrels per day, a 6.6% rise over the previous year.

"Overall, the recovery in global economic growth, and hence oil demand, are expected to gain momentum in the second half," according to OPEC’s monthly report published on Thursday.