By Adedapo Adesanya
Oil edged higher on Friday on strong economic data in the Eurozone, the United States, and the United Kingdom, with Brent futures up by 56 cents to $81.66 per barrel, while the US West Texas Intermediate crude (WTI) rose by 50 cents to $77.87 per barrel.
Despite the gain at the final session, both futures fell for the week as the interest rate and demand uncertainty weighed heavily on the market as Brent posted a weekly loss of 5.4 per cent, while WTI fell 5.6 per cent.
Both crude benchmarks slid by more than 2 per cent on Thursday – to their lowest since the unexpected announcement in early April of production cuts by some countries of the Organisation of the Petroleum Exporting Countries (OPEC) on recession fears and swelling US inventories.
A survey from the eurozone, the US, and the UK lifted oil prices on Friday.
The eurozone economic recovery has unexpectedly gathered pace this month as the bloc’s dominant services industry saw already-buoyant demand rise, more than offsetting a deepening downturn in manufacturing.
HCOB’s flash Composite Purchasing Managers’ Index (PMI), compiled by S&P Global and seen as a good gauge of overall economic health for Europe, jumped to an 11-month high of 54.4 in April from March’s 53.7.
S&P Global also said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month. That was the highest level since last May and followed a final reading of 52.3 in March.
British businesses also reported a bounce in activity and the slowest input cost inflation in more than two years.
The preliminary reading of the S&P Global/CIPS UK Composite Purchasing Mangers’ Index (PMI) also showed the slowest input cost inflation in over two years, but price pressures look strong enough for the Bank of England to raise rates again next month.
The PMI – spanning services and manufacturing firms – rose to 53.9 in April from 52.2 in March.
However, economic uncertainty and the prospect of rising interest rates continued to hang over oil markets.
Also, uncertainty over demand, especially for the upcoming summer driving season, continues to weigh on the oil market.
Meanwhile, the US Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May.
