Analysts said that the outlook for summer oil demand seems optimistic, and some even predict that the decline in COVID-19 may be a rearview mirror.
Prior to the US Memorial Day weekend, which kicks off the US Memorial Day weekend, oil prices had their biggest weekly increase since mid-April.
West Texas Intermediate Oil’s weekly gains are set at more than 5%, even though Friday’s prices did not change much. A series of positive economic data in the United States this week continue to highlight that demand recovery is taking shape in the world’s largest oil consumer.
As more and more Americans hit the road and gasoline inventories are at their lowest levels in nearly 30 years, some people see the country facing pressure from hurricanes that destroyed refineries in Texas and Louisiana.
Edward Moya, senior market analyst at Oanda Corp., said: “The demand outlook seems to be very strong, especially in the United States, and it is indeed improving in Europe. The optimism is that advanced economies will include Covid. In the sight glass. Before the end of summer.”
Nonetheless, since March, prices have stayed in the $10 range, and the volatility of the Brent crude oil global benchmark has fallen to its lowest level since August last year. There are still supply concerns regarding the resumption of international negotiations on the Iranian nuclear agreement, which may pave the way for the country to increase its oil supply. At the same time, the Organization of Petroleum Exporting Countries and its allies will meet next week. Delegates at the meeting said that the alliance is expected to increase rubber stamp oil production.
Michael Lynch, President of Strategic Energy and Economic Research, said: “The overall market sentiment is mild.” “People are looking for a stable market in the near term,” as demand continues to take shape, “but as Iran’s supply increases Pick-up, which limits the development of things.”
- At 12:17 pm New York time, WTI crude oil for July delivery rose 14 cents to $66.99 per barrel.
- Brent crude oil settled in July rose 31 cents to 69.77 US dollars per barrel, and the contract will expire on Friday.
- The more actively traded August contract rose 22 cents to $69.42 per barrel.
The ministers of the OPEC+ Alliance are scheduled to meet on June 1 to evaluate the global market and its production policies. Of the 24 analysts and traders surveyed by Bloomberg, all but four predicted that they would approve the transaction that was originally scheduled to increase by 840,000 barrels per day in July and completed a three-part process. To resume production of just over 2 million barrels this summer.
The long-term spread of WTI reflects the optimistic outlook of the market. The U.S. benchmark oil price in December 2021 is $5 per barrel higher than the same-month futures in 2022. The spread widened by nearly $1 this week, setting the highest price since mid-March.
- Bloomberg’s survey of traders and refiners shows that Saudi Aramco may increase the official price of its flagship light Arabian light crude oil by 10 cents per barrel for sale to Asia in July.
- Bloomberg calculated from the loading plan that the total exports of the main North Sea grades Brent, Forty, Osseberg, Ecofisk and Troll (or BFOET) will increase to 755,000 barrels per day in July.
- The Dutch government believes that an order that mandates Royal Dutch Shell Plc to limit its carbon dioxide emissions below 45% by 2030 is “far-reaching.”
- Moody’s Investors Service said that shareholders and Dutch courts this week imposed a series of crackdowns on some of the world’s largest oil companies, showing that the industry faces higher credit risks.
- According to Wall Street’s two largest companies, China’s efforts to curb the rise in commodity prices may be futile because it has lost the ability to dominate the market.