Oil price caps best week since 2017
Crude posted the longest weekly winning streak since November 2017, amid concerns over supply shortfalls from countries like Venezuela and optimism over US-China trade talks. Futures in New York rose as much as 0.9%, leading to a 4% rally for the week.
The Brent crude contract added 24 cents, to $69.64 a barrel, on the London-based ICE Futures Europe exchange, after briefly topping $70 a barrel, for the first time since November, in the previous session.
Opec’s production dropped for a fourth straight month, in March, while Venezuela’s oil output has plunged by half, amid power failures.
As for the discussions between the US and China, China’s vice premier, Liu He, said the two sides “reached new consensus on such important issues as the text” of a trade agreement, Xinhua News Agency reported.
Crude rose, along with US equities, after a report showed domestic hiring rebounded in March more than was forecast.
The market is focused on “Opec confirmation that they will continue to be disciplined. We are looking at potentially less output from shale, mess in Venezuela, and now there is risk in Libya,” said Bart Melek, head commodity strategist at Toronto Dominion Bank. “We’ve seen people get a lot more happy about going long in this environment.”
The US benchmark crude climbed more than 30% during the first three months of the year, as the Organisation of Petroleum Exporting Countries, and its allies, trimmed production as part of an agreement to help balance global oil markets.
Escalating tensions in Libya and Venezuela are also providing support for crude. West Texas Intermediate crude for May delivery advanced 42 cents, to $62.52 a barrel, on the New York Mercantile Exchange. Prices have rallied for a fifth straight week.
Prices have also been lifted this week by signs that the US and China are on track to resolve the ongoing trade dispute that has threatened oil demand.
US president, Donald Trump, said that while any trade deal with China was probably still weeks away, both sides were making progress on an accord that could be “very monumental.”
Excluding production-sharing agreements, Russia has cut its average oil output in April by 225,000 barrels a day, energy minister, Alexander Novak, said in Moscow. US sanctions on Venezuelan and Iranian oil, as well as output cuts by the Saudi Arabia-led Opec and Opec’s allies, are creating a shortage of heavy-to-medium ‘sour’ crude that is sulphurous and dense.
