Americas News
Oil Notches Daily, Weekly Gains As Analysts Focus On Tightening Supplies
Oil on Thursday managed to post a third weekly gain and minuscule daily gains as the after effects of large U.S. stockpile draws bested ongoing concerns about the global economy.
Brent settled up 13 cents, or 0.2 percent, at $85.12 per barrel; West Texas Intermediate settled up 9 cents, or 0.1 percent, at $80.70.
For the week both benchmarks rose over 6 percent, which pundits say was largely due to the Organization of the Petroleum Exporting Countries (OPEC) and allies last Sunday announcing a surprise cut of about 1.16 million barrels per day (which analysts said would cause an immediate price rise and the U.S. called inadvisable during an unstable market).
However, Robert Yawger, director of energy futures at Mizuho Securities, warned that "Demand destruction as function of the threat of recession is greater than the cut by OPEC+."
Yawger’s comment was informed by the fact that although the number of Americans filing new claims for unemployment benefits fell last week, annual revisions to the data showed that applications were still higher this year than initially thought.
Also in the U.S., the Institute for Supply Management said its non-manufacturing PMI fell to 51.2 last month from 55.1 in February (above 50 indicates growth in the services industry) - which some regarded as not just a temporary downward blip but more of an emerging trend.
But Stephen Brennock, oil analyst at PVM, expressed opinions that were in line with the bullish side of the equation: "The oil market's bullish momentum may have paused, but upside potential remains given the tightening supply backdrop."
Francisco Blanch, an analyst at Bank of America Corp., remained neutral by stating, “Physical OPEC+ crude oil cuts will clash with monetary central bank hikes designed to rein in demand, posing macro risks.”
