Brent crude prices stayed a bit firm at the last trading session of the week as they hovered near $70 a barrel as production cuts by OPEC+ constrained supply. Optimism about a recovery in energy demand for the better half of this year gave Oil bulls enough support in staying near the $70 a barrel price level.
In addition, oil traders are buoyed by the decision of OPEC+, in the past few weeks to largely curbing oil production in April.
The British-based oil contract, Brent crude is on track to post weekly gains for the eighth week after touching a 13-month high at the first trading session of the week following attacks on Saudi Arabian oil facilities.
At press time, Brent crude futures dropped by 0.2%, to $69.52 a barrel while U.S. West Texas Intermediate crude for April traded at $65.83 a barrel, plunging by 0.3%.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics further broke down the oil macros keeping oil prices at such price levels;
“After a few days of consolidation post-OPEC+, there has been a strong rebound in oil prices driven by gasoline and refined products signaling that economic recovery moves in full swing.
“Oil prices roar to the sound of ringing gas pump counters as according to the US Department of Transportation, more and more folks take the highways ahead of what is likely to be the biggest pent up driving season on record as the US could reach herd immunity from Covid-19 by summer vacation time,” Innes stated.
What to expect: The Oil market remains tight and global supplies will continue to draw until OPEC+ members change their output stance.
Backwardation continues to generate positive carry for holding length further along the curve.