After moving lower for a second session just shortly after the regular session opened Friday, U.S. West Texas intermediate Brent crude oil and international benchmark times rose to a new straight multi-week high. ahead of mid-session, on its way to its more than 2-percent gain.
On Friday, WTI crude oil settled in April at $ 59.38, up $ 1.24 or + 2.13% and April Brent crude oil futures ended at $ 62.43, up $ 1.29 or + 2.07%.
Early in the session, there were rumors in the markets with rumors that OPEC + was considering cutting the current production limits to reflect the current sharp rise in prices. Technical traders were trimming long positions due to overbought oscillator readings, while others responded to a weaker demand outlook from OPEC and the International Energy Agency (IEA).
Light size may have been the reason for the sharp intraday rise in prices with most of the major players in Asia on holiday. The price action suggests that intraday shorts were caught off guard with a sudden turn in sentiment. The upside spike in prices showed that short sellers were willing to pay anything to get out of losing jobs.
Oil prices have risen in recent weeks due to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and affiliated producers in the OPEC + group.
U.S. President Joe Biden will meet a bipartisan group of mayors and regulators as he pushes for approval of a $ 1.9 trillion coronavirus aid plan to boost economic growth and help millions of unemployed workers.
Meanwhile, all three U.S. stock indices closed higher for a second straight week, while there was a sharp drop in new COVID-19 cases and live hospitals hoping to return to normal life.
OPEC confirmed expectations for a global recovery in oil demand in 2021, trimming the forecast by 110,000 barrels per day (bpd) to 5.79 million bpd.
In addition, the International Energy Agency (IEA) said oil supply was still exceeding global demand, although COVID-19 vaccines are expected to support oversupply.
Demand data from the world’s largest oil importer, China, painted a bleak picture.
The number of people who traveled in China ahead of the Lunar New Year holidays fell 70% two years ago when coronavirus restrictions prevented the world’s largest annual domestic migration, data showed official.
Finally, market rebalancing could face headaches if U.S. production rises, analysts and traders said.