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Futures Movers: Oil prices decline, but stay on track for a more than 6% weekly climb

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Oil futures pulled back on Friday, after posting four consecutive session gains, but remained on track for a more than 6% weekly climb.

Support from a strong economic report from China helped to offset pressure from concerns that rising cases of COVID in parts of the world threaten a fitful recovery from the demand-sapping pandemic.

The energy markets have so far been buttressed by monthly reports that point to a healthy recovery from the pandemic, as well as tensions between the U.S. and Iran and Russia, which could have some impact on crude markets.

This week, the International Energy Agency lifted its forecast for oil demand this year in its monthly report and data from the Energy Information Administration revealed a third straight weekly decline in U.S. crude inventories.

Those reports were the “biggest bullish forces this week, along with pretty good jobs data,” Michael Lynch, president of Strategic Energy & Economic Research, told MarketWatch.

Still, he believes “prices are near a peak for now,” and that prices pulled back Friday due to profit taking.

On Friday, West Texas Intermediate crude for May delivery 
CLK21,
-0.47%

CL.1,
-0.47%

was down 29 cents, or 0.5%, at $63.17 a barrel on the New York Mercantile Exchange after rising 0.5% a day ago.

June Brent crude
BRN00,
-0.19%

BRNM21,
-0.19%

edged down by 6 cents, or 0.1%, at $66.88 a barrel on ICE Futures Europe. It hit a notable intraday high on Friday above $67, after the global benchmark picked up 0.5% on Thursday.

For the week, WTI was looking at a weekly gain of 6.5%, while Brent was on track for a rise of 6.2%, based on the front-month contracts, FactSet data show. Those weekly returns would mark the best such rise for the contracts since the week ended March 5.

Also on Nymex, May gasoline
RBK21,
-0.29%

fell 0.3% to $2.05 a gallon, looking at a weekly rise of over 4%, while may heating oil shed 0.2% to $1.90 a gallon, poised for a weekly rise of around 4.9%.

May natural gas
NGK21,
+1.02%

tacked on 0.7% to $2.68 per million British thermal units, trading up 6% for the week.

On Friday, the focus for oil traders was on China which reported that its first-quarter gross domestic product jumped 18.3% on a year-on-year basis. A report on retail sales for the People’s Republic, one of the biggest importers of crude, also showed a more than 34% rise.

Global cases of COVID remain a key concern though, given the potential for economic disruption and lower energy demand. The World Health Organization warned Friday that the global tally of confirmed cases of the coronavirus-borne illness COVID-19 has almost doubled in the last two months, and is now approaching the highest rate seen since the start of the pandemic. Case numbers are climbing in nearly all regions, including the Americas, with India, Brazil, Poland and Turkey becoming hot spots.

Traders also kept an eye on talks between the U.S. and Iran amid negotiations toward a new nuclear accord.

Read: Why oil traders should keep an eye on Iran even as nuclear talks look unproductive

U.S. sanctions imposed on Russia, over alleged election interference and hacking, were being weighed for their impact on energy trade. Russia is one of the world’s biggest producers of crude and a member of group known as OPEC+, consisting of the members of the Organization of the Petroleum Exporting Countries and their allies.

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