Connect with us

Hi, what are you looking for?

Commodities & Futures

Oil Heads for Back-to-Back Weekly Gain as Commodities Power On

Commodities43 minutes ago (May 07, 2021 12:27AM ET)

(C) Reuters. Oil Heads for Back-to-Back Weekly Gain as Commodities Power On

(Bloomberg) — Oil headed for a second straight weekly advance as investors bet on rising energy demand amid a broad rally in commodities, with robust trade data from China highlighting the strength of the global economy.

West Texas Intermediate gained 0.5%, rebounding from a drop on Thursday. The U.S. benchmark has risen 2.3% this week and is on pace for the first back-to-back weekly increase since early March as vaccine-aided economic activity picks up in the U.S., Europe and China. That’s offsetting concern about resurgent coronavirus waves elsewhere, including in key crude importer India.

Crude has rallied in 2021 as investors target assets that will prosper on the recovery from the pandemic. The gains were buttressed by supply cuts from the Organization of Petroleum Exporting Countries and its allies, although these are now being relaxed, and record monetary support from the Federal Reserve. U.S. payrolls data later Friday will yield fresh insights into the rebound.

“Brent at $68 to $69 appears to be broadly in equilibrium, having factored in the U.S.-Europe reopening optimism and the Covid hotspots across Asia and Latin America,” said Vandana Hari, founder of Vanda (NASDAQ:VNDA) Insights. “The worst of India news has been baked in. I don’t see it delivering bigger shocks to oil.”

Figures from China on Friday showed total exports rose more than expected in April and imports climbed, reflecting strong domestic and international demand as well as surging commodity prices. Energy consumption in Asia’s largest economy has rebounded from last year’s pandemic-driven slump, with crude imports swelling by more than 7% in the first four months of 2021.

Oil’s powerful climb forms part of a wide advance in raw materials that has propelled the Bloomberg Commodity Spot Index to the highest level since 2011. With copper hitting a record on Friday, that gauge is on course for its fifth consecutive weekly rise, the best run of gains since August.

Global benchmark Brent came close to breaking through $70 a barrel this week, getting to within 5 cents of that mark on Wednesday and hitting the highest intraday level since mid-March. It’s also headed for consecutive weekly gains.

In India, the third-largest oil importer, a model prepared by advisers to Prime Minister Narendra Modi suggests the outbreak could peak in the coming days. Still, the group’s projections have been changing and were wrong last month.

Investors are also tracking efforts by Washington and Tehran to revive a nuclear agreement that could see U.S. sanctions on Iranian crude flows lifted, boosting supplies. With diplomats set to enter a fourth round of indirect talks in Vienna later Friday a U.S. official said the two sides could revive the pact as early as this month if Tehran proves its willingness to rein in its atomic work.

“I don’t think Iran is a factor in the short-term outlook,” Hari said. “Beyond the window dressing, it looks like an impasse.”

Brent’s prompt timespread was 35 cents a barrel in backwardation. While that’s a bullish pattern — with near-term prices above those further out — it’s narrowed from 69 cents two weeks ago.

(C)2021 Bloomberg L.P.

Oil Heads for Back-to-Back Weekly Gain as Commodities Power On

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.


Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.


Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved