Oil Up On The Week As Demand Recovery Optimism Intensifies

Meanwhile, Russia says it's ready to support export curbs: File Image/Pixabay

A big jump in China's gross domestic product wasn't enough to prevent a modest slide in crude prices on Friday; however, overall optimism for demand recovery that gained traction in earlier sessions was enough to propel oil to a healthy weekly gain.

Brent on Friday settled down 17 cents at $66.77 per barrel but finished up 6 percent on the week; West Texas Intermediate settled down 33 cents at $63.13, with the declines attributed to worries over India's coronavirus infection rate hitting a record while Germany's chancellor stating a third wave of the virus had the country in its grip.

By contrast, oil was supported by China's first-quarter GDP jumping 18.3 percent year on year and its refiners processing about 20 percent more crude than a year earlier; this followed Thursday's news of substantial increases in U.S. retail sales and a drop in unemployment claims.

Edward Moya, senior market analyst at Oanda Corp, said, "The world's two largest economies are starting to really shine, and despite difficulties in Europe they're starting to get vaccinations going as well.

"Having Europe, China and the U.S. for the most part looking at a return to normalcy, that speaks wonders for the demand outlook, which is very supportive for higher prices."

Peter McNally, global head for industrials, materials and energy at Third Bridge, added, "We're closing the gap on gasoline and jet fuel; international travel is not coming back this summer, but as far as the two biggest markets go–China and the U.S.–it's encouraging."

Presumably buoyed by demand recovery sentiment, Alexander Novak, deputy prime minister of Russia, on Friday said that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will gradually restore oil output between May and July; he added that his country was prepared to support export curbs on oil products in order to bolster the domestic market.