Futures Movers: Oil scores weekly gains as reopening optimism outweighs COVID worries


Oil futures rose on Friday and scored weekly gains on growing optimism over the economic reopening in the U.S. and Europe, though concerns remain about the surge in COVID-19 cases in India.

“Easing travel curbs in the United States and Europe, coupled with optimism over a global economic recovery” have inspired oil bulls to re-enter the scene, said Lukman Otunuga, senior research analyst at FXTM.

Also, “given how the dollar is likely to remain depressed following the disappointing U.S. jobs report, this could offer oil bulls a helping hand in the week ahead,” he told MarketWatch.

The U.S. created just 266,000 new jobs in April, falling well short of the 1 million forecast by economists surveyed by Dow Jones and The Wall Street Journal. Against that backdrop, the ICE U.S. Dollar Index

fell 0.8%, and is down more than 1% for the week, providing some support for oil, which is traded in the greenback.

West Texas Intermediate crude for June delivery


tacked on 19 cents, or 0.3%, to settle at $64.90 a barrel on the New York Mercantile Exchange, leaving front-month prices for the U.S. benchmark up 2.1% for the week, according to Dow Jones Market Data.

July Brent crude

the global benchmark, rose 19 cents, or 0.3%, at $68.28 a barrel on ICE Futures Europe. Brent gained 2.3% for the week.

Read: Electric vehicle market growth is a blessing for some metals — and not a big worry for oil

“Reopening optimism is playing out in the commodities market, where base metals and oil have been beneficiaries,” said Sophie Griffiths, analyst at Oanda, in a note. “As more evidence of a global economic rebound comes through, oil bulls are gaining in confidence.”

Strong economic data out of the U.S. and China and optimism over prospects for Europe as vaccine distribution improves has helped buoy oil, analysts said. China’s exports and imports grew faster than expected in April.

At the same time, upside for oil has been limited, with Brent failing earlier this week to top the $70-a-barrel threshold, as COVID-19 cases continue to surge in India, the world’s third-largest oil importer.

Indian Prime Minister Narendra Modi is under growing pressure to impose a nationwide lockdown.

On Friday, India recorded a record of 414,188 confirmed cases in the past 24 hours, bringing its tally to more than 21.4 million since the pandemic began with little prospect seen of bringing down the curve in the short term, according to the Associated Press. The Health Ministry also reported 3,915 additional deaths, bringing the total to 234,083. Both figures are likely undercounted, according to experts.

“Traders are aware that the timing of the health crisis in India coincides with production increase agreed to” by the Organization of the Petroleum Exporting Countries and their allies, said Manish Raj, chief financial officer at Velandera Energy. Starting in May, “600,000 additional daily barrels have begun to come to market, with more production increases to follow,” he said, referring to gradual output hikes by OPEC+, as well as Saudi Arabia which had been voluntarily curtailing production.

“Are OPEC’s production increases too much, too soon?  This is the money question in everyone’s mind that will dictate oil prices.”

— Manish Raj, Velandera Energy

“Are OPEC’s production increases too much, too soon?  This is the money question in everyone’s mind that will dictate oil prices,” Raj told MarketWatch.

In other Nymex dealings, June gasoline

rose 0.6% to $2.13 a gallon, with the contract ending up 2.4% for the week. June heating oil

added 1.1% to $2.01 a gallon, for a weekly rise of 4.6%.

June natural gas

settled at $2.96 per million British thermal units, up 1% Friday, for a weekly rise of 0.9%.

: Walt Disney World and Universal Studios Orlando are relaxing these COVID safety protocols — will others follow suit?

Previous article

Cryptos: ‘A total make-or-break for dogecoin,’ says one crypto investor as Elon Musk prepares to host ‘Saturday Night Live’

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in News