On Friday, both UK and US crude oil futures’ prices gained more than 2 per cent with Brent crude rounding off the week 5.3 per cent higher, spacediving to their highest levels in more than a year as investors were heavily pricing in on the hopes that another round of trillion-dollar stimulus package from a Biden Administration would buoy up global economy and rekindle global demands.
Apart from that, as the 14-member OPEC (Organization of Petroleum Exporting Countries) alongside its Kremlin-led allies continued to tighten up their belts on crude oil outputs, US crude contracts notched a weekly percentage gain of as much as 4.7 per cent.
In factuality, high-flying hopes over a near term economic revival following rollout of a mass-scale pandemic vaccination campaign in a majority of G20 economies alongside a squeezed supply line of crude oils from top oil producers across the globe seemingly had galvanized the gains of crude oil contracts this week.
Crude oil extends gaining streak on stimulus hope, output curbs
In parallel, driving investors’ optimisms higher, US President Joe Biden said later this week that he was planning to meet with a number of bipartisan lawmakers and state Governors as part of his push towards passing the $1.9 trillion pandemic stimulus bill by mid-March as promised earlier in January this year.
Alongside this, a sharp decline in hospitalization due to pandemic alongside progresses over a mass-scale vaccination campaign in the United States, which was planning to inoculate as many as 100 million or a third of US population by May 2021, alongside in Europe, had bolstered investors’ hopes further despite a growing number of odds as the Paris-based IEA (International Energy Agency) said in a statement later last week that the global crude oil market was still facing off a critical supply glut, while US oil drilling rigs counts soared for a 12th straight week in a row.
Citing statistics, in the day’s commodity market wind down, UK crude ended 2.1 per cent higher to $62.43 per barrel, while US WTI (West Texas Intermediate) crude oil futures’ prices surged 2.1 per cent to settle down at $59.47 a barrel after hitting a session high of $59.82 per barrel, its highest since January 9, 2020.
In the week, US crude shelved a weekly gain of 4.7 per cent, while Brent crude futures’ prices climbed 5.3 per cent. Meanwhile, expressing a through-and-through optimism over the recent leg of rallies in crude oil contracts’ prices, Capital Economics analysts wrote in a client note, “Oil prices held onto their recent gains this week, buoyed by further signs that crude stocks, particularly in the U.S., are falling.
We anticipate that inventories will fall further later this year as transport fuel demand revives in tandem with the easing of virus-related restrictions on travel. ”