Americas News
Iran Worries Eclipsed As More Demand News Causes Oil To Rise 1%
The steady flow of good news about rapidly recovering economies as the pandemic withers continued to influence crude traders on Thursday, who caused oil prices to rise 1 percent on the strength of a better than expected U.S. job report.
The U.S. Labor Department revealed that the number of Americans filing new claims for unemployment benefits dropped more than expected last week, and the country's economy, which in the first quarter achieved its second-fastest growth pace since the third quarter of 2003, is gathering momentum.
As a result, Brent rose 59 cents, or 0.9 percent, to settle at $69.46 per barrel, while West Texas Intermediate rose 64 cents, or 1 percent, to settle at $66.85 per barrel.
Oil is now at its highest price in more than two years.
Also on Thursday, two sources told media that the Organization of the Petroleum Exporting Countries (OPEC) and allies will likely agree to maintain the pace of gradually easing oil supply curbs when they meet on Tuesday, since the expectation is global demand will continue to rise.
Yet another indication of demand recovery: Americans taking to the roads as Covid restrictions are rapidly being eliminated means that gasoline prices are expected to be the highest for a Memorial Day weekend in seven years (an average of $3.04 per unleaded gallon), and prices could stay elevated all summer.
The AAA anticipates 37 million Americans to travel this weekend, a 60 percent increase over last year when the economy was still shut down; Patrick De Haan, head of petroleum analysis at GasBuddy, believes the fact that international travel is still difficult will spur the increase: "Everyone wants to get out, [and] if there's any hiccup in the system this summer, it's going to be hard to fuel up."
Indeed, Goldman Sachs Group Inc. said commodities will continue to face incremental tightness in the second half of this year, with little evidence to suggest enough of a supply response to derail the bull market.
