By Adedapo Adesanya
More good news spread at the oil market as the international benchmark, Brent crude, gained 54 cents or 0.92 per cent to sell at $59.02 per barrel on Thursday.
This also extended to the US futures, the West Texas Intermediate (WTI) crude, which appreciated by 1.38 per cent or 77 cents to trade at $56.23 per barrel.
The day’s positive outlook came on the back of strong US economic data, falling inventories and the decision by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to stick to its output cuts, which have recently been helping the market.
Thursday’s support was further strengthed as data from the US Labor Department showed a drop in the number of Americans filing for unemployment benefits last week.
This helped boost prices, while investors were also expecting positive data from the government’s comprehensive monthly employment report due on Friday.
The market was further bolstered by news that Democrats in the US Congress took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan.
Crude inventories in the US dropped as government data showed that IS crude oil stockpiles last week unexpectedly fell to 475.7 million barrels, their lowest level since March.
On OPEC’S end, there are expectations that the output cuts will keep the market in deficit throughout 2021, even though the group reduced its demand forecast.
Although the market faces a strong US dollar, which typically moves inversely with oil prices as it hit a more than two-month high against a basket of other currencies.
Also, a fragile recovery in aviation in Asia is being challenged out by a resurgence of COVID-19 in the region, pushing back forecasts for when air travel will get back to pre-virus levels.
Slow vaccination also possesses more risk as an end to the pandemic has been undermined by the slow pace of vaccinations and the rise of new variants of the coronavirus.
Still, with more vaccines proving successful in trials and infections falling in some areas, demand for oil and fuel is likely to pick up as more of the world’s population gets inoculated against COVID-19.
