Oil prices increased over 7% during the week ending April 16 over signals of greater oil demand and positive global economic data, although countries are still battling the coronavirus pandemic and virus variants, which are affecting mitigation efforts.
International benchmark Brent crude traded at $62.62 at 1100 GMT on Friday, posting a 7.04% increase from Monday when trade at 0712 GMT registered at $62.62 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $63.47 at the same time on Friday, rising 7.61% relative to $58.98 a barrel on Monday.
Oil prices have recently been under pressure as demand concerns intensify investor caution.
Following on from a surge in infection rates in European countries from different variants of the virus, India has now recorded over 200,000 coronavirus cases in a single day for the first time since the start of the pandemic, taking the country’s tally to over 14.2 million, data from Johns Hopkins University showed.
However, strong economic data from the US and China was a shot in the arm in support of higher oil prices.
A year after the start of the coronavirus pandemic, China’s economy showed a record growth of 18.3% in the first quarter of 2021, according to official figures released by the National Bureau of Statistics (NBS) on Friday.
The figures showed that showed China’s gross domestic product (GDP) grew 18.3% powered by “strong domestic and foreign demand” from January to March.
The country faced a slowdown – a 6.8% contraction – during the same quarter last year when it imposed strict lockdowns in many areas to stem the spread of COVID-19.
Research conducted by the country’s state oil and gas group, China National Petroleum Company, also showed that China’s 2021 net crude oil imports are forecast to grow year-on-year by 3.4% to about 559 million tonnes.
Adding more to the bullish oil price sentiment, retail sales in the US rose 9.8% in March compared to the previous month, exceeding expectations of a 6.1% increase, according to the US Commerce Department.
According to the US Labor Department, the number of Americans filing first-time unemployment claims dropped by 193,000 to 576,000 last week, the lowest amount since March 14, 2020.
Also, a more-than-expected drop in US crude oil stocks helped the upward trend in oil prices, signaling a recovery in oil demand.
US commercial crude oil inventories fell by 5.9 million barrels, or 1.2%, to 492.4 million barrels, relative to the market expectation of a fall of 2.1 million barrels, according to data released by the country's Energy Information Administration (EIA) on Wednesday.
The declining US dollar index also boosted oil prices, encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices.
The value of the greenback, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.17% to 91.53.
-Positive demand forecasts
In its Monthly Oil Market Report on Tuesday, the Organization of Petroleum Exporting Countries (OPEC) forecast that global oil demand is expected to increase by around 6% to an average of 96.5 million barrels per day (bpd) in 2021.
The report pointed to gasoline as the key driver for an oil demand recovery, as the summer driving season is about to begin.
Just one day after, the International Energy Agency (IEA) revised its forecasts for 2021, saying global oil demand will grow by 5.7 million bpd, or 6.3%, to an average of 96.7 million bpd this year, based on better economic forecasts and stable, timely fiscal indicators.
By Sibel Morrow