Oil prices closed the week more than 5% higher on Brent, the global benchmark that rose on Friday as strong US economic data and expectations of a recovery in global demand outweighed concerns about more supply from Iran after sanctions. is removed.
Brent rose 17 cents, or 0.2%, to $69.63 a barrel, the highest close since May 2019. US West Texas Intermediate crude was down 53 cents, or 0.79%, at $66.32 a barrel.
“Buoyed by good economic data and risk appetite among investors in financial markets, Brent is making a new bid for the psychologically important $70/barrel,” Commerzbank analyst Eugen Weinberg said.
“Concerns about demand due to the pandemic give rise to optimism given the rapid turnaround of consumers.”
Analysts expect global oil demand to approach 100 million barrels a day in the third quarter on summer travels in Europe and the United States, following widespread COVID-19 vaccination programs.
“Gasoline demand has now exceeded 2019 levels in many areas,” ANZ analysts said in a note. Said.
Strong economic data from the United States, the world’s largest economy and oil consumer, was also bolstered by the number of Americans new applications for unemployment benefits dropping to the lowest level since mid-March 2020, beating estimates. Read more
Increasing coronavirus infections in Asia are putting pressure on prices.
Infections in the South Asian region surpassed 30 million on Friday, according to a Reuters tally led by India, which is battling a second wave of COVID-19 and a vaccine shortage across the region. Read more
The prospect of more Iranian oil coming to the markets also capped gains.
“Iran will slow the rally,” said Bob Yawger, director of energy futures at Mizuho in New York, adding that market participants were wary of the possibility that a deal between Iran and Western powers could inject further. put on the market.
Iran and the global powers have been negotiating in Vienna since April to work on the steps Tehran and Washington should take on sanctions and nuclear activities to fully comply with Iran’s 2015 nuclear deal with world powers.
Within the United States, Yawger said there are concerns about the lack of demand potential for this Memorial Day holiday weekend. “There are some areas of concern,” he said.
More than 34 million Americans are expected to hit the highways between May 27 and May 31, the holiday weekend when the summer driving season begins. But gasoline prices face an average of about $3.04 per gallon, the most expensive since 2014.
The government also said in its latest monthly report that crude oil production in the US also rose 14.3% to 11.2 million barrels per day in March, hit by the cold in February. The oil rig count is an early indicator of future production, energy services firm Baker Hughes it went up for nine consecutive months, according to.
Balancing expectations of a recovery in demand against a possible increase in Iranian supply, the Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, appear to stick to the current pace of gradually loosening oil supply restrictions. OPEC sources said they will meet on Tuesday.
