By Adedapo Adesanya
Oil recouped some losses on Friday after three straight days of declines as authorities said Iran and world powers made progress a nuclear deal, meaning that the country’s crude could return to the market.
At the session, the Brent crude recovered $1.35 or 2.04 per cent to trade at $66.44 per barrel, while the West Texas Intermediate (WTI) crude gained $1.04 or 2.65 per cent to sell at $63.58 per barrel.
Despite this, the two contracts fell 3 per cent for the week, their biggest loss since March, after Iran’s president said the United States was ready to lift sanctions on his country’s oil, banking and shipping sectors.
There are expectations that Iranian crude and condensate production could rise to 3.2 million barrels per day in December, from around 2.8 million barrels per day in the first quarter.
However, optimism surrounding fuel demand recovery this summer as vaccination programmes in Europe and the United States would allow more people to travel helped boost prices on Friday.
Europe that initially suffered a slow vaccination effort is speeding up plans to make up for the lost time to open back its economy.
On Thursday, senior European Union officials agreed in principle on a set of rules enabling its population to travel freely once again throughout all 27 member states from next month.
Though this is still subject to final approval by the European Parliament, it paves the way for the introduction of a Digital COVID Certificate for the nearly 450 million inhabitants of the bloc.
Prices also got a boost from a weather system developing in the Gulf of Mexico, as the Atlantic hurricane season draws near and could start early. The hurricane season officially begins on June 1 and can lead to disruptions in energy production and refinery activity in the region.
On Friday, the US National Hurricane Center showed a tropical disturbance forming in the Gulf and warned that an increase in activity could result in the formation of a “short-lived tropical depression or storm before the system moves inland over the northwestern Gulf Coast.”
The market continues to monitor the situation in Asia as rising cases across parts of the continent are raising concerns.
As India’s coronavirus disaster worsens, new waves of infections are fast engulfing a growing number of nations across South and Southeast Asia, with some grappling with their worst outbreaks since the pandemic began.
Infections are also surging in Nepal, Sri Lanka, the Maldives, Thailand, Cambodia, and Indonesia.
Dipo Olowookere