Oil prices ended their last trading session of the week on a bullish note with growing price optimism on global energy demand picking up as the world’s largest economy recorded relative drawdowns in oil stockpiles with the recent hacking of Colonial Pipeline, an incident that disrupted oil supplies.
At the end of Friday’s trading session, the British-based oil contract, Brent crude futures recorded gains of over 2% to settle at $68.83, with the West Texas Intermediate futures settling at $65.51 a barrel after posting gains of about 2.65%.
It is important to note that oil bulls are on their third-week winning streak with recent reports from the International Energy Agency revealing the global glut that built up in 2020 has been cleared. The agency had earlier lowered its energy demand expectations over the recent spike in COVID-19 cases in India, the world’s third-largest importer of crude oil.
Still, recent economic data coming from the world’s largest economy postulate energy demand is expected to gain strong momentum relatively, particularly this summer with restrictions easing in many key economic hubs and social mobility gathering pace. President Joe Biden had also announced that vaccinated Americans can ditch their face masks, thereby boosting the morale of its citizens that the worst is over.
In addition, recent price actions reveal, oil bulls now hold the ace as the greenback posted losses after the U.S. Federal Reserve officials stated there would be no imminent need to tighten monetary policy despite rising inflation. Considering that the black viscous hydrocarbon is priced in dollars, a weaker dollar makes the commodity cheaper for holders of other currencies, potentially triggering more buying pressures.