(adds settlement prices)
By Barani Krishnan
Investing.com – The good news for the week is not over for the oil bull, and the crude oil market is reflecting it.
Thursday’s first quarter US GDP reading was in line with expectations, adding octane to an oil rally that pushed crude oil prices nearly $ 3 a barrel, or 5%, up from Monday’s close.
The US gross domestic product is likely to have grown 6.4% in the first quarter, said the Commerce Department in the first of three quarterly readings for the economy. According to Investing.com, the market had expected growth of 6.1% for the first quarter.
A weekly reading on US unemployment benefits also showed a 2% decrease in filings last week, after a 7% decrease in the previous week and a 25% decrease in the previous week.
“The economy has strengthened, aided by fiscal stimulus and a relaxation of COVID restrictions and fears, although not quite as much as implied,” TD Securities said in a note.
The Commerce Department noted that the economy rebounded from 4.3% growth in the previous quarter, particularly after a surge in consumer spending helped by the $ 1,400 Covid Relief Checks mailed by the Treasury Department last month.
One noticeable thing that consumers enjoyed: new trucks that helped tell a steady demand for fuel.
The New York-traded benchmark index for US crude oil rose $ 1.15, or 1.8%, to $ 65.01 a barrel. WTI closed at $ 61.91 on Monday before starting a three-day run-up.
The London-traded global benchmark index for crude oil rose $ 1.27, or 1.9%, to $ 68.05. Brent finished at $ 65.65 on Monday.
This week’s oil rally started in earnest after the Energy Information Administration updated the state of US oil supply and demand on Wednesday, implying that supplies were tightening.
The EIA said the US was up just 90,000 barrels last week, compared to analysts’ expectations for a construction of 659,000 barrels
, including diesel and, fell 3.342 million barrels for the week ending April 23, contrary to expectations of a draw of 648,000 barrels.
Inventories rose 92,000 barrels last week, compared to expectations for 508,000 barrels to build.
Wall Street Bank Goldman Sachs (NYSE 🙂 also lit a flame under oil by forecasting Brent prices of up to $ 80 a barrel by the end of October and WTI of $ 77.
In contrast to this week’s bullish theme was the story of the ongoing devastation from Covid in India, India’s third largest buyer worldwide.
Rystad Energy warned on Wednesday that the crisis in India could cut demand for oil liquids by 575,000 barrels a day in April and 915,000 barrels a day in May 2021, which could disrupt the near-balanced global oil market and create a sizeable flood.
A meeting of the joint technical committee of the OPEC + cartel’s oil producers that just concluded on Monday could clear a year-long oil glut caused by the pandemic by the end of the second quarter.
OPEC +, which has withheld at least 7 million barrels of daily supplies from the market since April 2020, will start producing more oil starting next month. It is planned to add 350,000 barrels per day in May and June and an additional 400,000 barrels per day in July.