Oil Market Remains Bullish as Brent Trades at $71.61/Barrel

By Adedapo Adesanya

The oil market remained in the bullish territory on Friday as supply discipline and recovering demand countered concerns such as rising coronavirus cases and the possible return of Iranian oil.

According to data, the Brent crude traded at $71.61 per barrel after it rose by 30 cents or 0.42 per cent, while the United States West Texas Intermediate (WTI) quoted at $69.62 per barrel after it rose 81 cents or 1.18 per cent.

This week, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to stick to the earlier supply cut deal as member countries remained disciplined towards the agreement reached last year.

In addition, a weekly supply report from the US Energy Information Administration (EIA) showed that crude inventories dropped more than expected last week.

Both contracts recorded a second week of gains as Brent rose more than 3.2 per cent and US crude made a 5 per cent rise.

Oil extended gains after employment figures out of the US showed nonfarm payrolls increased by 559,000 jobs last month.

The US Dollar weakened after the report, making oil cheaper for holders of other currencies and lending support to oil prices.

Rising demand and the fast pace of vaccinations in countries such as the United States and some other European countries are also adding to the bullish hold for oil.

These, coupled with a slowdown in talks between the United States and Iran over the latter’s nuclear programme, which reduced expectations of a rise in Iranian oil supply, continue lending support to the black gold.

Meanwhile, a slower vaccination rollout and high infections in the likes of Brazil and India are hitting demand in high-growth oil markets.

The market is also looking at plans by Saudi Arabia and Russia to defy the International Energy Agency’s recommendations and continue investing in oil and gas.

The IEA last month called for a stop in global fossil fuel use, saying the exploitation and development of new oil and gas fields must stop this year if the world wants to reach net-zero emissions by 2050.

Almost 200 countries ratified the Paris climate accord in 2015, agreeing to pursue efforts to limit the planet’s temperature increase to 1.5 degrees Celsius above pre-industrial levels. The agreement requires net-zero greenhouse gas emissions by the middle of the century.