Fresh Optimism Lifts Oil Market into Positive Territory

By Adedapo Adesanya 

The oil market traded positive on Friday amidst fresh optimism over a global economic recovery despite the threats posed by rising cases of COVID-19 in India.

The global benchmark, Brent crude, gained 15 cents or 0.22 per cent to sell at $68.24 per barrel, while the United States oil benchmark, the West Texas Intermediate (WTI) crude, appreciated by 19 cents or 0.29 per cent to trade at $64.90 per barrel.

Both Brent and WTI recorded a second consecutive weekly gain as the ease in the restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations paved the way for a revival in fuel demand.

On Friday, the market balanced from positive data from the world’s two largest oil consumers, the United States and China. Chinese data showed export growth accelerated unexpectedly in April. 

Exports surged 32.3 per cent from a year earlier to $263.9 billion beating analysts’ forecast of 24.1 per cent, and the 30.6 per cent growth reported in March.

However, crude imports by the world’s biggest importer fell 0.2 per cent in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day, the lowest since December.

In the United States, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers from slumps caused by the coronavirus. 

Lingering concerns around the spreading coronavirus in India, the third-largest oil importer, however, continues to stress oil demand. 

India on Friday reported a record daily rise in coronavirus cases of 414,188, while deaths from COVID-19 swelled by 3,915, according to the country’s health ministry data.

India’s total coronavirus infections now stand at 21.49 million, while its total fatalities have reached 234,083. The South Asian nation has added 1.57 million cases and just over 15,100 deaths this week alone.

The market is also looking at supply discipline from the Organization of Petroleum Exporting Countries and its allies (OPEC+). While the group is gradually restoring some output, there is confidence that the market can absorb the extra production.