Oil Ends Week with 3% Gain as Demand Recovers
The oil market ends the week with a 3% gain as demand recovers amidst growing concerns over the spread of the covid-19 delta variant in some parts of the world.
Also, a strong decline in the crude inventories in the United States supported positive sentiment about demand outlook plus a slowdown in covid-19 cases in India, China.
International benchmark Brent crude traded at $74.95 on Friday, posting more than a 3.17% rise from Monday when it trades at $72.65 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $73.47 at the same time on Friday, increasing over 3.3% relative to $71.12 a barrel on Monday.
During the week, oil prices came under pressure due to reported rising COVID-19 Delta variant cases, which raised the possibility of renewed restrictions and lower mobility.
The Tokyo Olympics, which was initially planned for the summer of 2020 but was then postponed to this year due to the pandemic, is taking place under the shadow of COVID-19. So far, 198 cases linked to the Olympics have been recorded since July 1.
Nonetheless, positive sentiments in the market came when the World Bank and COVAX, the COVID-19 Vaccines Global Access initiative, revealed their plans to speed up vaccine supplies to developing countries where COVID-19 inoculation rates are lagging far behind those of richer nations.
Through its Advance Market Commitment (AMC) program, COVAX expects to make available up to 430 million more vaccine doses between late 2021 and mid-2022.
Oil prices also found further support after the US Federal Reserve hinted of a bullish economy, which it said is currently COVID-proof.
Investor hopes of greater short-term demand have been raised after the US Energy Information Administration (EIA) announced Wednesday that the country’s crude oil inventories fell by 4.1 million barrels, or 0.9%, during the week ending June 23. With last week’s decline, crude stocks in the country have seen the lowest level since January 2020.
Other US data revealed that the country’s economy showed a slight growth rate of 6.5% in the second quarter, remaining lower than the expected 8.5% rate as strong consumption was partially offset by lagging property investments and inventory drawdowns.
Read Also: Bitcoin Recovers after Citi’s “Tipping Point” Report
Oil Ends Week with 3% Gain as Demand Recovers
