Oil jumps by more than 6% this week thanks to prospects for American and Chinese economic recovery 2021-04-18T17:06:13 Oil jumps by more than 6% this week thanks to prospects for American and Chinese economic recovery Oil jumps by more than 6%: Oil prices were able to secure a weekly fulcrum on the likelihood of increasing demand and signs of economic recovery in China and the United States. These positive sentiments can at least offset concerns about the rise of Covid-19 infections in major countries. Last Friday, the price of Brent crude for the June delivery contract fell by 17 cents, or 0.3%, to reach a level of $ 66.77 for a barrel. World record for oil price closed rising by 6.07% this week, after rising in four sessions before Friday. At the same time, the price of West Texas Intermediate crude for May delivery fell by 33 cents, or 0.5%, to record $ 63.13 a barrel. This week, West Texas Intermediate crude prices jumped by 6.42%. This week, world crude oil prices jumped to their highest level in one month, after they were previously fixed for 3 weeks. The expectation of global economic growth which will be better than before has made expectations for oil crude demand brighter. Detailed performance for oil during a week In general, the energy market witnessed a fairly active trading week with 4 consecutive gains and only one slight decrease. After 2 stable increases from April 12 to 13, world oil prices unexpectedly rose by about 5% at the April 14 session, when a report of the International Energy Agency (IEA) boosted optimism about demand recovery. At the end of the session, Brent North Sea crude rose by $ 2.91, or 4.6%, to trade at $ 66.58 a barrel, while US light crude rose by $ 2.97, or 4%, and closed at $ 63.15 a barrel. Despite a slight drop in the April 16 session, and throughout the entire week, West Texas Intermediate crude is still recording a rise in prices by 6.4%, while Brent crude rose by 6.1%. These are the best weekly gains for both Brent crude and West Texas Intermediate crude since the week ending on March 5. Things helped to support oil this week This week, oil power began when Chinese economic growth in the first quarter reached 18.3% on an annual basis. This is the fastest expansion since China’s quarterly GDP issues began in 1992. Thereafter, a large increase in US retail sales and a decline in Thursday’s unemployment subsidy requests have led to greater optimism regarding global economic recovery. Oil demand growth The International Energy Agency (IEA) and the Organisation of Petroleum Exporting Countries (OPEC) raised their expectations for oil demand growth in 2021. They noted a stronger than expected recovery in activity in some economies. These expectations are also supported by US government data on Wednesday which showed a decrease in crude oil inventories by 5.9 million barrels because of increased refining activity, surpassing analysts’ expectations of a decline by 2.9 million barrels. Organisation also expects to rebalance global oil supply and demand during the second half of this year. The International Energy Agency also stated that after that, manufacturers might have to increase production by 2 million barrels a day to meet demand. Oil recovered from its lowest level due to last year’s pandemic, supported by record decreases in oil production by OPEC and its allies, a group known as OPEC +. This group will meet on April 28 to consider further changes in the supplies agreement. Baker Hughes for energy services in a report followed Friday stated that the number of drilling platforms rose to its highest level since April 2020 in front of competitors. However, all economies do not recover, as rare Corona infections in India reached new records. At the same time, on Friday, the German Chancellor said that the third wave of Coronavirus put the country into a pandemic grip. More support may be coming New good news is coming this week. The International Monetary Fund (IMF), in the April release of the World Economic Outlook Report, provides optimistic expectations for the global economy. In the report, this is compared to expectations of January which reached 5.5%. The United States is leading the economic recovery. In January, the IMF expected that GDP would grow by 5.1%, but it has now been adjusted to 6.4%. The United States is the world’s largest consumer of crude oil. When economic growth rises, demand for crude oil will, of course, increase. Countries whose GDP has been adjusted There are also many other countries whose GDP has been adjusted by increasing, for example, the United Kingdom by 5.3%, up 0.8% points compared to last January’s expectations. Then, Japan rose by 0.2% points to reach 3.3%. China’s GDP is also expected to rise to 8.4% this year, from 8.1% previously. China is the world’s second-largest consumer of crude oil after the United States. In the first quarter of 2021, GDP growth was impressive, compared to the same period of the previous year during the first three months of this year. Market consensus compiled by Reuters estimates that China’s domestic product during the first three months of 2021 will grow by 19%on an annual basis. Although 18,3% is lower than expected, it remains the highest record in China’s economic growth history. Covid-19 Covid-19 will also remain a basic driver for the market The global epidemic of Covid-19 is still a major concern in the market, as it can disrupt the economy and drive down energy demand. On April 16, the World Health Organisation (Who) warned that the total number of confirmed Covid-19 infections worldwide has nearly doubled during the last 2 months and is now close to the highest rate since the beginning of the epidemic. Cases are increasing in most regions, including the Americas, as India, Brazil, Poland, and Turkey have become hot spots. In addition, the market will also monitor negotiations between the United States and Iran as two countries are working towards a new nuclear agreement.