Oil maintains gains for the fourth week in a row

Oil maintains gains for the fourth week in a row

 Oil maintains gains for the fourth week in a row Despite the volatility


West Texas Intermediate renewed its gains for the fourth week in a row as product markets remained tight amid healthy demand
surpassing concerns about an economic slowdown that has roiled financial markets

Evest follows market developments in the following report



Oil continues to gain for the fourth week in a row

Forecast of a recovery in Chinese demand for oil

Weekly oil performance




Oil continues to gain for the fourth week in a row

WTI crude for June delivery rose 0.35 percent to settle above the US $110.28 per barrel
after fluctuating in a session as stocks slumped near a bear market, affecting prices


Despite the volatile trading, it posted the best series of weekly increases since mid-February

Brent crude oil for July delivery increased 0.46% to $112.55 per barrel


Rising demand for automotive fuels and shrinking inventories ahead of the summer driving season have reiterated
a significantly tight supply situation even with wider economic concerns that slumped stock markets


According to experts: “There is still a disconnect between the financial risk markets associated with crude financial assets and the physical market that attempts to absorb the issuances of the Strategic Petroleum Reserve (SPR) to meet the demand for products
“This split leads to continued fragmentation and volatility of markets – it could be a tough summer for energy traders


Crude oil is up nearly 50 percent this year, also supported by Russia’s invasion of Ukraine, which has sent the markets under successive shocks


The United States and the United Kingdom announced an embargo on Russian exports, increasing inflows into Asia
China is seeking to replenish its strategic inventories of cheap Russian oil even as officials struggle to quell the COVID-19 outbreak
India also boosted its purchases


There were conflicting signals from China on Friday
While banks cut the key rate for long-term loans at a record rate to boost the slowing economy
Shanghai has found its first cases of COVID-19 out of quarantine in six days
It raises questions about whether easing the city’s lockdown will be affected


Traders are also closely watching the refined product market
as a global crisis over inventories coincides with the start of the summer driving season





Forecast of a recovery in Chinese demand for oil


In China, oil demand is expected to recover as authorities in Shanghai lifted some coronavirus lockdowns


Oil prices added two days of gains with concern that weak economic growth could hinder demand recovery


The June futures contract price for a barrel of US oil, or West Texas Intermediate, rose 0.91% to settle at $113.23 per barrel
In the meantime, the June futures contract for North Sea crude or Brent rose by 0.46% to $112.55 per barrel


In the past five days, the price of WTI rose by 2.5%, its fourth consecutive weekly gain
while Brent rose by 0.90%, its third positive week in the past four weeks


In the meantime, gasoline futures for June delivery rose almost one penny to $3.83 per gallon
On the other hand, natural gas prices on the date of supply in that month
fell by 22 cents and remained at $8.08 per thousand cubic feet





Weekly oil performance

Black gold rose more than 2% in the first trading session of the week on optimism about a significant recovery
in demand in China after positive signs that the COVID-19 pandemic was “declining” from the worst-hit areas in the country
Things are expected to return to normal in the financial position of Shanghai (China) from June 1
The easing of the embargo measures will begin on May 21

Optimism among EU diplomats and officials about reaching an agreement on a phased embargo on Russian oil has also boosted oil prices
despite supply concerns in Eastern Europe


With the European Union’s planned embargo on Russian oil and a slow increase in production
by the Organization of the Petroleum Exporting Countries (OPEC), oil prices are expected to hold up


According to Reuters

at the May 17 trading session, for the first time since May 2020, Brent crude was lower than WTI. Specifically
Brent crude fell by $2.31, or 2%, to $111.93 per barrel, while WTI fell by $1.80, or 1.6%, to $112.40 per barrel


The price of “oil” fell as it was reported that the United States could ease some restrictions on the Venezuelan Government
raising hopes for an additional short supply of the oil market


Oil prices also declined after US Federal Reserve Chairman Jerome Powell warned that the economy could be hit by efforts to cut inflation
The Fed Chairman believes there may be some economic problems related to lowering inflation
The US central bank will continue to accelerate the tightening of US monetary policy until it is clear that inflation is falling


Crude oil prices gained momentum, falling by an additional 2.5% in the May 18 session
reversing early gains as traders became less concerned about dwindling supply after government data
and the United States shows US refineries increasing production as the stock market slumped
The strength of “green silver” also contributed to pushing oil prices lower


In a fluctuating session on May 19, oil prices recovered after two days of losses
The price of “oil” rose due to a weak dollar and expectations that China might ease some of the embargo
restrictions could boost demand in the world’s largest oil consumer country


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