U.S. West Texas Intermediate and international-benchmark Brent crude oil futures edged lower on Friday but still managed to finish higher for the week. Nonetheless, the markets did post potentially bearish chart patterns on their daily charts, which could put early pressure on them early Monday.
Traders said that prices were likely underpinned by the news that China’s first-quarter gross domestic product jumped 18.3% year-on-year. That news followed a big increase in U.S. retail sales and a drop in unemployment claims released on Thursday.
The big up move for the week, however, was fueled by positive oil demand growth outlooks by both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) and a bigger-than-expected draw in this week’s government inventories report.
The International Energy Agency (IEA) and OPEC upwardly revised their global oil demand growth forecasts for 2021 this week to 5.7 million barrels per day (bpd) and 5.95 million bpd respectively.
“Fundamentals look decidedly stronger,” the IEA said in its monthly report.
“The massive overhang in global oil inventories that built up during last year’s COVID-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing.”
“As the spread and intensity of the COVID-19 pandemic are expected to subside with the ongoing rollout of vaccination programs, social distancing requirements and travel limitations are likely to be scaled back, offering increased mobility,” OPEC said in the report.
“The global economic recovery continues, significantly supported by unprecedented monetary and fiscal stimulus,” OPEC said. “The recovery is very much leaning towards the second half of 2021.”
U.S. crude oil stockpiles dropped more than expected as refiners increased activity heading into the summer driving season, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell by 5.9 million barrels in the week to April 9 to 492.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.
U.S. gasoline stocks rose 309,000 barrels in the week to 234.9 million barrels, less than analysts’ expectations for a 786,000-barrel rise.
Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels versus forecasts for a 971,000-barrel rise, the EIA data showed.
Refinery utilization rates rose by 1 percentage point to 85% of overall capacity. That is the highest since March of last year, just before the coronavirus pandemic caused refiners to severely restrict processing activities as demand dove.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire