Oil set for maximum October gain since tight supply

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Russian Oil Fields Ahead of OPEC's 180th Meeting

Photographer: Andrey Rudakov / Bloomberg

Photographer: Andrey Rudakov / Bloomberg

Oil was making its biggest weekly gain since October on confidence that OPEC + producers are promising to cut off global supply.

Futures in New York rose for the fifth day to $ 57 a barrel. OPEC + has pledged to continue draining virus-driven surpluses as Chinese investments decline. Saudi Arabia rejected expectations for a reduction and left unchanged oil prices for Asian buyers are another sign of market strength.

Crude is up almost 9% this week, backed by a rally in global stocks as corporate profits rebound and central banks remain supportive. Technical indicators suggest that oil is repayable, however. The 14-day relative strength indices for both Brent and West Texas intermediate futures are at overbought levels.

Crude’s rally this week has pushed up prices in the technical arena

Expectations for stronger oil demand are also getting prices strong, with governments around the world rolling out Covid-19 vaccines. Although shape is not yet complete, there is wear and tear ready to return to 2019 levels by the end of the year, according to Citigroup Inc. Money is flowing back into the market, with WTI futures holdings at their highest level since July 2018.

“Saudi Arabia’s challenge to the market’s prospect for a slight decline in Arab Light’s official retail prices confirms what we have been saying all along: that they are firmly in favor of market prices, ”Said Howie Lee, an economist at Overseas Banking Corp.“ There is little to stop the ongoing product cycle at this time. ”

Prices
  • West Texas Intermediate for delivery in March rose 0.7% to $ 56.64 a barrel on the New York Mercantile Exchange as 9:55m in Singapore
  • Brent for settlement in April climbed 0.6% to $ 59.20 on the ICE Futures Europe exchange and has risen 7.6% this week
  • Crude futures declined 0.1% to 357.3 yuan a barrel on the Shanghai International Power Exchange and are up about 7% this week

The oil income curve reflects investor confidence. Brent’s downtime is 28 cents a barrel back, a bullish structure where near-date prices are more expensive than later ones.

Saudi Aramco left its Asian prices for March at the highest levels since at least September, it said in a statement, after OPEC + ‘s main committee expressed confidence that crude supply and demand are rebound balance. The representative with the state raised prices for US and European customers.

Other oil market news
  • The wreck in 2020 is still raging in Big Oil boardrooms as officials this week announced deep spending cuts and expect to pay high-stakes debt back even as raw rallies.
  • The oil-filled Canadian province hit hard by Joe Biden’s move to kill the Keystone XL pipeline is considering obtaining compensation from the U.S. through an old free trade rule that remains in place.
  • A Nigerian judge has issued an arrest warrant for the managing director of a local unit Exxon Mobil Corp. for not appearing before the country ‘s anti – graft group which is investigating what it says is a whopping $ 213 million.

– Supported by Rob Verdonck

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