In a rangebound trading session on Friday, both US and UK crude oil futures’ prices had ebbed off, as an increase in supplies from OPEC+ nations alongside frets over a potential demand-crunch following a sharp uptick in pandemic cases across the globe had fanned up the flames.
In factuality, in the week’s steep downward pressure was mostly unenveloped following decision from major oil producers to peter out their production curbs in phases between May to July, while a surprise rise in US crude inventories last week, added to further strains.
On top of that, optimisms over a potential recovery in oil demands in a near term, had been dampened throughout the week as pandemic cases soared in major oil consuming nations including the US and euro zone, while an extension of stiffer lockdown measures in major euro zone economies had poured fresh scorns on market participants’ hope of a solid demand-surge.
Aside from that, a sluggish vaccination drive in Europe alongside a harsh politicization of pandemic vaccinations in euro zone, had jittered fresh worries that a flourishing oil demand landscape might be short-lived despite a two-decade peak euro zone flash composite manufacturing PMI (Purchasing Managers’ Index) in March reported a week earlier.
Crude oil falters, posts weekly decline
Citing statistics, in the day’s commodity market closure, UK crude contracts due to be expired on June lost 0.3 per cent to $63.04 a barrel, while US WTI (West Texas Intermediate) crude oil futures scheduled to be expired on May, dropped 0.2 per cent to $59.38 per barrel.
Over the week, both crude oil contracts reported weekly declines above 2 per cent, though Brent crude futures have still been hovering far from a two-week low of $60.47 a barrel. Meanwhile, referring to an ill-timed OPEC+ decision to hike oil outputs, President of Ritterbusch and Associates in Galena, Illinois, Jim Ritterbusch said, “Favorable oil demand prospects are being largely offset by the expected increase in OPEC + production that could be approximating 2 million barrels per day by the end of July”.