Photographer: Luke Sharett / Bloomberg
Photographer: Luke Sharett / Bloomberg
Brent oil dropped some gains at the end of the worst week since October as the dollar strengthened and investors rated the short-term outlook on demand.
Futures in London lost 1% and fell below $ 64 a barrel as a rising dollar reduced the attractiveness of commodities priced in US currency. The question shows some signs of weakness with the number unsold cargoes loaded in April from swelling West Africa while Germany proposes expansion closure restrictions. Despite a 2% gain on Friday, crude oil suffered a heavy weekly loss after a bearish start to last week.
See also: Oil is still on a bumpy road to recovery despite price fluctuations
Saudi Arabia, meanwhile, has seen another attack on its energy facilities. While the offensive by Iran-backed Houthi rebels on a Aramco refinery had no impact on oil supply on Friday, this is the latest in a year series of attacks on the kingdom.
Despite the weekly slump, there is confidence in the long-term outlook and a return to higher prices. Goldman Sachs Group Inc. said that the recent sale was short-lived and that the rebalancing will continue with vaccinations that utilize higher mobility. The market will be keeping a close eye on the OPEC + meeting next week for any change in its production policy in May, especially after the oil slump and comments from the International Energy Agency that supply is plentiful.
“Oil can continue to fluctuate between red and green, and is torn between fear of demand and the hard-line optimists,” said Vandana Hari, founder of Vanda Insights in Singapore. Prices are likely to hang at current levels, at least until OPEC +’s next step, ‘she added.
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The rapid time spread for Brent is still in a bullish decline – where prices of close prices are more expensive than prices dated later – although the gap narrowed over the course of last week. The spread was 16 cents per barrel on Monday, compared to 67 cents at the beginning of the month.
Iran’s supreme leader Ayatollah Ali Khamenei, meanwhile, said his country was in no hurry to nuclear deal, although he reiterated that Tehran is still willing to return to the original terms of the deal once the US has lifted sanctions. Despite the penalties, Iranian crude exports appear to be rising, with China recently increasing its purchases.
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– Assisted by Rob Verdonck