Oil Notches Another Weekly Gain Despite Market Mired In Conflicting Sentiment

by Ship & Bunker News Team
Saturday June 22, 2024

The recent template informing crude trading – uncertainty and mixed messages about the economy and demand – came into play again on Friday, as improving U.S. demand clashed with negative economic news elsewhere, resulting in daily losses for the commodity but another weekly gain.

Brent settled down 47 cents at $85.24 per barrel, while West Texas Intermediate settled down 56 cents at $80.73; for the week, the benchmarks ended 3 percent higher, and analysts noted that while Brent remains overbought, Friday's decline pushed WTI out of overbought territory for the first time in four days.

The main reason behind Friday's lacklustre trading was a strong U.S. dollar, which kindled worries about global demand growth; this trumped signs of improved U.S. demand and previously reported falling fuel inventories.

More mixed messages came in the form of U.S. business activity climbing to a 26-month high in June amid an employment rebound; but price pressures subsided considerably, triggering hope of a sustained slowdown in inflation.

However, U.S. home sales fell for a third straight month in May due to record-high prices.

Still, many analysts chose to maintain a clearcut upbeat stance: Prateek Kedia, analyst at JPMorgan, told clients in a note that "Gasoline demand in the U.S. has been on a steady rise since the Memorial Day weekend and we expect a further advance as record 71 million Americans are expected to travel during the upcoming July 4th holiday."

Meanwhile in India, refiners processed nearly 1.3 percent more crude oil in May than a year earlier; but in the euro zone, business growth slowed sharply this month, and from China came the concern that escalating tensions with the European Union regarding electric vehicle imports could trigger a trade war.

In other oil news on Friday, no less than four refineries in southern Russia were targeted, with 70 drones intercepted and destroyed over Crimea and the Black Sea and 43 over the Krasnodar region, according to the Russian defense ministry.

Ukranian forces also struck a drone facility in the southern Russia town of Yeysk where Iranian-designed Shahed drones were stored and launched, according to insiders with knowledge of the matter.