Oil rises above US $ 67 in fifth day of gains on demand hopes

(London) REUTERS: Oil rose above US $ 67 a barrel yesterday, gaining for a fifth session, as a stronger demand outlook and signs of economic recovery in China and the United States offset rising COVID-19 infections in some other major economies

China’s first-quarter gross domestic product jumped 18.3 percent year-on-year, official data showed yesterday. On Thursday figures showed a rise in U.S. retail sales and a drop in unemployment claims.

“Given the improving outlook for the world’s two biggest economies, there is little chance of the market’s feel-good glow being extinguished any time soon,” said Stephen Brennock of oil broker PVM.

Brent crude rose 26 cents or 0.4 percent, to US $ 67.20 a barrel by 0950 GMT, heading for a weekly gain of about 7 percent. U.S. West Texas Intermediate (WTI) crude added 16 cents or 0.3 percent, to US $ 63.62.

New U.S. sanctions imposed on Russia, one of the world’s top oil producers, over alleged election interference and hacking could also support prices. “Though they do not affect the oil sector directly, they could lead to higher financing costs and general uncertainty in trade with Russia,” said Eugen Weinberg of Commerzbank. Helping the rally this week, the International Energy Agency and the Organisation of the Petroleum Exporting Countries (OPEC) both made upward revisions to oil demand growth forecasts for 2021. 

Figures on Wednesday also showed U.S. crude inventories fell by 5.9 million barrels.

Demand hopes offset concern about rising coronavirus cases in other big economies. India’s infection rate hit a record high while Germany’s chancellor yesterday said a third wave of the virus has the country in its grip.

Oil has recovered from pandemic-induced lows last year, helped by record cuts to oil output by OPEC and its allies, a group known as OPEC+.

Some of the OPEC+ cuts will be eased from May, with the group meeting on April 28 to consider further tweaks to the supply pact.