Oil in Longest Run of Weekly Gains Since 2017 on Tight Supply

Oil in Longest Run of Weekly Gains Since 2017 on Tight Supply

Oil in Longest Run of Weekly Gains Since 2017 on Tight Supply

Oil prices rallied on Friday, amid strong USA employment data, easing worries over weakening oil demand due to potential economic slowdown.

In the trailing week, United States crude oil active futures rose 4.7% and closed at $62.58 per barrel on April 2, their highest closing level since November 5. Brent fell 6 cents on Wednesday, after touching $69.96, highest since November 12, when it last traded above $70.

Brent opened Monday at $66.77 per barrel while WTI traded at $58.76 per barrel, driven by the decline in the US oil rig count by eight over the previous week. WTI was headed for its fifth consecutive weekly rise.

Prices have also been lifted this week by signs that the USA and China are on track to resolve the ongoing trade dispute that has threatened oil demand. "Signs of global economic slowdown had been a headwind for oil prices, but this morning's report seemed to dispel at least some of those concerns".

Crude rose along with U.S. Additional support is being provided by the US sanctions against Iran and Venezuela.

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The two sides have gone through several rounds of talks, however as Reuters reported, on Thursday commander Haftar ordered his troops to march on Tripoli, escalating the conflict between the two sides.

The Organization of the Petroleum Exporting Countries (OPEC) and producer allies such as Russian Federation, together known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) this year to prop up prices.

Venezuela depends on the upgraders to convert the extra-heavy crude oil produced in the Orinoco Belt into exportable grades usable in overseas refineries.

The increase in the number of USA oil rigs is yet another factor that the traders should be monitoring closely, since this week, the US energy companies added 15 new rigs for first time in seven weeks. In trade on April 5, the oil rig count data could be an important event for oil prices. The U.S. Vice President Mike Pence announced on Friday that the United States will add 34 PDVSA owned or operated vessels to the sanctions list. Profit booking might be behind the fall in oil prices. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.

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