• April 20, 2024

Oil prices finish lower, but score a more than 6% weekly climb

Oil futures pulled back on Friday and fell lower after four consecutive session wins, but prices rose more than 6% weekly.

Support for a strong economic report from China helped offset pressures from concerns that rising cases of COVID in parts of the world threaten a troubled recovery from the demand-side pandemic.

Energy markets have so far been propped up by monthly reports pointing to a healthy recovery from the pandemic, as well as tensions between the US and Iran and Russia that could have some impact on crude oil markets.

This week has the International Energy Agency repealed its forecast for oil demand this year in its monthly report and data from the Energy information management revealed a third consecutive weekly decline in US crude oil inventories.

Those reports were “the biggest bullish forces this week, along with pretty good job data,” Michael Lynch, president of Strategic Energy & Economic Research, told MarketWatch.

Still, he believes that “prices are near a high for now” and that prices fell on Friday due to profit-taking.

On Friday, West Texas Intermediate Crude for delivery in May
CLK21, -0.54%

CL.1, -0.54%
fell 33 cents, or 0.5%, to $ 63.13 a barrel on the New York Mercantile Exchange.

June Brent crude
BRN00, -0.04%

BRNM21, -0.04%
at ICE Futures Europe down 17 cents or almost 0.3% to USD 66.77 per barrel. It hit a notable intraday high above $ 67 on Friday after the global benchmark rose 0.5% on Thursday.

For the week, WTI was up 6.4% weekly, while Brent was up 6.1% based on front-month contracts, according to Dow Jones Market Data. These were the best weekly returns for both contracts since the week ended March 5th.

Also on Nymex, May gasoline
RBK21, -0.58%
fell 0.6% to $ 2.04 a gallon, despite a 4% weekly increase, while heating oil lost 0.2% to nearly $ 1.90 a gallon in May, a weekly increase of 4% .9%.

May natural gas
NGK21, + 0.98%
0.8% to $ 2.68 per million UK thermal units, up 6.1% for the week.

On Friday the focus for oil traders was on China, which reported that its gross domestic product was up 18.3% year over year in the first quarter. A report on retail sales of the People’s Republic, one of the largest crude oil importers, also showed an increase of more than 34%.

Read: The timber and steel markets expect the next big boost from Biden’s infrastructure plan

However, global cases of COVID remain a key concern given the potential for economic disruption and lower energy demands. The World Health Organization warned Friday that the global number of confirmed cases of the coronavirus-borne disease COVID-19 has almost doubled in the past two months and is now approaching the highest rate since the pandemic began. Case numbers are increasing in almost every region, including America, with India, Brazil, Poland and Turkey becoming hot spots.

Traders also watched talks between the US and Iran during negotiations on a new nuclear deal.

Read: Why oil traders should keep an eye on Iran even when nuclear talks seem unproductive

US sanctions imposed on RussiaTheir effects on energy trading were weighed against alleged electoral impairments and hacking. Russia is one of the world’s largest producers of crude oil and a member of the OPEC + group, which is made up of members of the Organization of Petroleum Exporting Countries and their allies.

On other news on Friday, Baker Hughes data revealed that the Number of active US drilling rigs drilling for oil was up 7 this week to 344, suggesting the likelihood of higher production.

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