Global oil edges up after strong economic data, but ends week lower

NEW YORK: Oil prices inched up as strong US economic data boosted demand sentiment and as production losses in sanctionshit Iran and Venezuela tightened the market.

Still, oil futures recorded weekly declines after a jump in US crude inventories reported this week.

Brent crude oil futures settled at US$70.85 a barrel, rising 10 cents. The global benchmark shed 2.6 per cent for the week, breaking a five-week winning streak.

US West Texas Intermediate (WTI) crude futures closed at US$61.94 a barrel, up 13 cents, while losing about three per cent percent during the week, its second straight weekly decline.

A US jobs report that showed growth surging in April and the unemployment rate dropping to a more than 49-year low of 3.6 per cent increased expectations that crude demand would stay strong.

“If more people are going to work, they’re going to have to drive or take transportation to get there,” Phil Streible, senior commodities strategist at RJO Futures in Chicago. “It’s a good indication we could expect to see gasoline demand, oil demand picking up into the summer.”

Equities rallied and the US dollar weakened following the report, which also supported oil futures, Streible said. Oil prices tend to follow moves in equities, and demand for the US dollar-linked commodity often increases when the greenback slips.

Gains in the oil market, however, were capped by Wednesday’s report that showed US crude inventories jumping to their highest since September 2017 and production hitting a record 12.3 million barrels per day last week.

Exports of US crude broke through three million bpd in November for the first time and peaked at 3.6 million bpd earlier this year, according to data from the Energy Information Administration.

This week’s US rig count, an indicator of future output, showed energy firms adding crude drilling rigs for the first time in three weeks, General Electric Co’s Baker Hughes energy services firm said.

US sanctions against Iran and Venezuela and supply cuts led by the Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, helped to tighten the market and support prices. — Reuters