On Friday, both US and UK crude oil futures’ prices had closed out the week more than 5 per cent higher with UK crude winding up the day at a two-year peak, as a raft of robust economic data in the United States alongside growing investors’ buoyancies over a bounce back in global demand outlook had eclipsed the concerns of a return of Iranian crude.
In point of fact, in the day’s lofty gains in oil prices were largely catalysed by a stronger-than-anticipated US Consumer Prices data with an inflation gauge vaulting its highest annual gain since 1992 over the twelve months through April this year, while a White House budget proposal of a gargantuan $4 trillion for fiscal 2022 added to further bullish bias into global commodity market.
Apart from that, over 34 million Americans are expected to hit the highways in the holiday weekend between May 27 and May 31 that marked up the beginning of a busy US Summer driving season, though US riders are expected to face off a gasoline price at around $3.04 per gallon, the highest since 2014.
However, the growing likelihoods of a return of Iranian crude had kept a lid on the gains, though, an improvement in pandemic outlook in India, the third-largest crude oil importer across the globe, with daily cases falling abruptly towards a 200,000-level after hitting above 400,000 mark earlier this month alongside an acceleration in vaccination campaign, had brightened up demand outlook.
Crude oil gains amid a raft of upbeat economic data
Citing statistics, as analysts were expecting oil demands to hit 100 million barrels per day over third quarter of the year, Brent spiked to a two-year peak of $69.63 per barrel and wrapped up the day 0.2 per cent higher, the futures’ highest closure since May 2019, while US WTI (West Texas Intermediate crude oil futures’ prices surged 0.79 per cent to $66.32 a barrel.
Both contracts had shelved more than 5 per cent gains in the week. Meanwhile, citing concerns over a likely return of Iranian crude in a near term, a director of energy futures at Mizuho in New York, Bob Yawger said, “Iran is going to slow down the rally,” adding that a number of market participants remained cautious ahead of the weekend holiday over growing possibilities that a successful restoration of 2015 nuclear treaty with the United States, would lead to a supply glut.