Crude oil prices were fired up for the seventh straight week, leading to the longest winning streak since April 2019.
Such incredible gains were largely attributed to strong hopes that next year, the global economic recovery will improve significantly amid high expectations that a new Covid-19 stimulus deal worth over $900 billion will soon be approved.
What you should know
At the last trading session for the week, the West Texas Intermediate futures settled up 1.53%, to close at $49.10 per barrel. The trading session’s daily high was $49.10 — less than $1 from the widely-anticipated $50 target of many oil traders.
- For the week, West Texas Intermediate gained more than 5%. The accumulated surge over the seven weeks period was about 36%. It was also the longest winning streak for the black liquid hydrocarbon since April 2019.
- London-traded Brent, the global benchmark for crude gained 1.65%, to close at $52.35 per barrel.
- For the week, Brent crude surged by almost 5%. Its total gain over the seven weeks was about 40%.
Oil bulls are riding high on the bias that record quantitative easing has helped in pushing prime financial assets including commodities prices. This is triggered by the impending COVID-19 stimulus deal and the U.S central bank’s commitment to buying more debt instruments in order to boost the fragile U.S economy.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on key fundamentals keeping crude oil bulls all fired up amid the passage of the long-awaited U.S stimulus bill:
- “Oil markets got pretty revved up by all the factory yard activity going on in Germany and positive PMI around the globe, which suggests the economic effects of the 2nd and 3rd wave is not nearly as problematic as feared. But the clear sentiment ‘tell’ is that crude is trading just short of its recent highs, despite the growing restrictions being imposed in response to Covid-19 infection waves. For sentiment to hold to the current form, Washington appears to be edging towards a new stimulus bill in the aftermath of President-elect Biden being confirmed by the electoral college and several senior Republicans acknowledging his victory.”
The most recent U.S crude oil inventory numbers excited a significant amount of oil traders enough to increase their buying momentum, keeping both oil major benchmarks above $49/barrel.