Despite the worsening of the epidemic in India.. Oil rises 2% during last week
Despite the worsening of the epidemic in India.. Oil rises 2% during last week: Oil prices slightly rose on Friday
despite disappointing data about job creation in the United States and bad health conditions in India, one of the major crude oil consumers.
Brent North Sea for July delivery closed at $ 68.28 a barrel, up 0.27% from Thursday’s closing. In New York,
West Texas Intermediate crude for June rose by 0.29% to record $ 64.90.
During the week, oil prices rose by about 1.90%.
Both oil contracts have risen thanks to the easing of travel restrictions in the United States and Europe and the activities of vaccinations and production programs have been recovered.
Oil performance during this week
Oil closed its second week in a row making gains,
but it slightly rose during the weekend as the Covid-19 crisis has worsened in India.
In general, prices closed with the second consecutive weekly rise amid optimism about a global economic recovery.
The prices of the two oil benchmarks rose by more than 1.9% over the week.
This is their second weekly gain in a row, as easing restrictions in the United States and Europe,
factories’ recovery, and vaccination against Coronavirus pave the way for reactivating fuel demand.
Oil prices may continue to perform positively this week, but it is not for energy operators to be excited about the idea that oil emerges from its narrow circulation.
According to Reuters, the short-term outlook for oil remains very mixed.
Disappointing data limit gains
The US economy added only 266,000 jobs in April.
This represented a quarter of what was expected, while the unemployment rate slightly rose by (0.1 points)to 6.1%.
This dispels fears of rising interest rates, giving more room for continued revitalization and demand for crude oil,
but the increase in infection cases of the virus in India is also affecting demand expectations.
In India, the current epicenter of the epidemic, the virus is not giving up and it continues to record another record of daily infections during the last 24 hours,
with 414,000 new cases. In addition, nearly 4,000 new deaths have been recorded according to official data,
which many experts consider to be significantly lower than reality.
In 2019, India was the world’s third-largest consumer of crude oil after the United States and China.
The oil market is globally affected by every daily increase in the number of Covid-19 cases,
especially from India and Japan, as the epidemiological situation is worsening very rapidly,
frustrating any morale towards the recovery of oil demand from there.
Nevertheless, investors are trying to move away from negative sentiments, and they focus on positives and start-up signs of normalization with vaccination campaigns progress worldwide, as they reduce the number of new infections of the virus around the world.
China has a big role to play
China’s imports – the world’s largest market for oil imports – declined in April by 0.2%,
from the previous year to 40.36 million tons, or 9.82 million barrels a day, according to Reuters.
This is the lowest volume of imports since December last year.
Other data from energy analytics firm OilX showed that China’s crude oil imports in April fell by 11% to 10.41 million barrels a day.
The amount of oil imported is less than March (11.69 million barrels a day) but the average of imported oil is still 5% higher than the level of April’s average in 2020.
This decline was expected before refineries filled their warehouses and they were about to begin maintenance operations.
All the analysts said that rising oil prices would slow the import of oil into this large market.
OilX also expects that China’s crude oil imports this year will grow by 11% thanks to domestic refining and a rebound in travel demand.
April 20, 2020, witnessed the largest historical decrease in world oil prices,
as the US crude contract fell to less $ 1,000 for the first time in its history, as a result of the worst global economic crisis since World War 11,
due to the health crisis, caused by the Covid-19 epidemic.
One year after “Black April” 2020, with an average of several trillion dollars of support brokered by central banks and governments,
large production cuts by OPEC + member states and a gradual restart of the global economy,
both the energy market and oil prices are globally recovering.
West Texas Intermediate and Brent crude oil prices jumped in recent months, reaching recent highs of $ 68 a barrel and $71.50 a barrel in a row,
on March 8, 2021, which represents the fastest historical recovery in the oil market,
after a correction of more than 70%, due to the Covid-19 pandemic.
Bond yields are falling in the United States and Europe
On the other hand, the return on US bonds for 10 years, which followed a steady course at 1.57%,
sharply fell to 1.46%, as non-agricultural employment data in the United States being much lower than expected.
However, as the purchase reacted in a short time,
it rose to 1.56%again and ended the day at 1.58%, up to one basis point.
On the other side, European region bonds were negative outside the UK.
Italy’s 10-years bond yields rose by 5 basis points,
German’s 10-year bond yield rose by 1 basis point and ended the day at 0.96% and 0.22% in a row,
while the British 10-year bond yield declined by 2 basis points to 0.77%.