Oil rose more than 2% in volatile trading on Friday but finished weeks around 7% lower as a new wave of coronavirus hit Europe, dampened hopes that fuel demand would recover soon. Brent crude settled $ 1.25 per barrel, or 2%, at $ 64.53 per barrel. West Texas Intermediate (WTI) Creve rose $ 1.42, or 2.4%, to $ 61.42. During the session, both traded in a wide range of more than $2 per barrel. Weekly losses for both benchmarks are only below 7%.
On Thursday, oil fell 7% because the large European economy reached into the locking, while vaccination programs were slowed by distribution problems and fear of side effects. Prices rose on Fridays because many market players see sell-off as excessive.
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“Sell-off will start moving several things that can slow down the rally,” said Phil Flynn, a senior analyst at the Price Futures Group in Chicago. “OPEC will be more worried about Covid, so this increases the chances that they will expand the cutting of production again, and with a sharp decline in oil prices, it might reduce incentives from US flakes manufacturers to advance their skiing.”
American shale production has swelled global oil supply as demand for fuel cratered losses during a pandemic. Meanwhile, the US drillers added nine oil rigs this week, the most significant weekly increase since January, Baker Hughes oil service company said. Concerns about the launch of vaccines capped oil increase.
Germany, France, and other countries have announced the resumption of inoculation with AstraZeneca’s shot after the regulator stated that the vaccine was safe. But the halt had previously made it more difficult to overcome resistance to vaccines. The British announced it would slow down the launch of the Covid-19 vaccine next month due to the postponement of supply.
Goldman Sachs said the oil market headwinds were related to the demand for the European Union. The supply of Iran would slow down the market balancing in the second quarter, even though it expects the organization of petroleum exporting countries and allies to act to compensate for it.
Iran has transferred the record number of crude oil to clients over China in recent months. In contrast, Indian refiners have added Iranian oil to their annual import plan of the assumption that OPEC sanctions will immediately make it easier.
Goldman estimates a significant increase in global oil demand in the coming months, raising the estimated price of Brent to $80 per barrel this summer. Hedge Funds and other money managers grow the position of net long American crude futures and options in the past week, said the US Commodity Futures Trade Commission (CFTC).
