Brent Falls as Market Overlooks Positive Economic Data
By Adedapo Adesanya
The Brent crude went bearish on Friday as the market overlooked strong economic recovery data to point southwards with the coronavirus gripping major economies.
The value of the international crude benchmark reduced by 17 cents or 0.25 per cent yesterday to trade at $66.77 per barrel, while the US crude benchmark, the West Texas Intermediate (WTI), decreased by 33 cents or 0.52 per cent to sell at $63.13 per barrel.
On Friday, China’s first-quarter gross domestic product (GDP) jumped 18.3 per cent year-on-year, according to official data.
The country’s National Bureau of Statistics said that the surge in growth came off a contraction in the first quarter of last year when the economy shrank by 6.8 per cent during the height of the domestic outbreak of COVID-19.
China was the first country to deal with the disease and the economy returned to growth by the second quarter of last year.
GDP expanded 10.3 per cent in the first quarter when compared with the same period in 2019, the statistics bureau said.
Another positive news that didn’t hold the market for long was an impressive rise in US retail sales and a drop in unemployment claims.
COVID-19 cases continue to hold India and Germany with India breaking its previous infection rate on a daily.
Since the beginning of April, India has reported more than 1.9 million new cases and over 10,600 deaths. In the first seven days of the month, the South Asian country reported more than 652,000 cases which have nearly doubled in the eight days since.
Earlier this week, India overtook Brazil to become the second worst-infected country behind the United States.
As for Germany, Chancellor Angela Merkel urged lawmakers on Friday to approve new powers that would allow her to force coronavirus lockdowns and curfews on areas with high infection rates.
Germany, Europe’s largest economy, recorded 25,831 new cases of COVID-19 overnight and 247 more deaths.
Meanwhile, the market will be studying new US sanctions imposed on Russia, one of the world’s top oil producers, over alleged election interference and hacking.
Oil has recovered from pandemic-induced lows last year, helped by record cuts to oil output by the Organisation of the Petroleum Exporting Countries and its allies, a group known as OPEC+.
However, some of the OPEC+ cuts will be eased from May and the group meets on April 28 to consider further changes to the supply pact.