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Benchmark crude oil prices rose Friday to finish the week at their highest levels this month, as economic indicators from China and the U.S., the world’s top two oil consumers, raised hopes for higher demand.
Oil prices also enjoyed support this week following a decline in the dollar and back-to-back weekly declines in U.S. crude inventories.
China reported a stronger than expected 6.7% jump in industrial production in April from a year ago, showing the potential for stronger demand ahead and supporting oil prices, although the pace of retail sales gains unexpectedly slowed.
In the U.S., data this week showed U.S. consumer prices rising less than expected in April, encouraging expectations of lower interest rates.
The U.S. CPI number showing a slowdown in the inflation rate has “brought some hopes back among traders who think that a drop in oil prices could boost economic activity, and that should support oil prices,” Zaye Capital Markets chief investment officer Naeem Aslam told Marketwatch.
Front-month Nymex crude (CL1:COM) for June delivery ended +2.3% to $80.06/bbl this week, including a 1% gain on Friday, and front-month July Brent crude (CO1:COM) closed +1.4% to $83.98/bbl on the week, with a 0.8% uptick on Friday, the best settlements for both benchmarks since April 30.
Meanwhile, front-month Nymex June natural gas (NG1:COM) finished +16.6% for the week to $2.626/MMBtu, including Friday’s 5.2% gain, its best settlement value since January 26.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
The Biden administration this week proposed ending future coal leasing on 13M acres of federal lands in the Powder River Basin, which spans Wyoming and Montana and accounts for nearly half of all U.S. coal production.
The U.S. National Mining Association slammed the proposal, “not only because it ignores the nation’s continued need for federal coal but because it also fails to acknowledge [the Bureau of Land Management] multiple use mandate under the Federal Land Policy and Management Act.”
The group says it is “outrageous” to propose an end to new leases given strong electricity demand and ongoing concerns about energy security.
The energy sector, as indicated by the Energy Select Sector SPDR ETF (NYSEARCA:XLE), ended the week +1.2%.
Top 10 gainers in energy and natural resources in the past 5 days: U.S. Gold Corp. (USAU) +40%, Plug Power (PLUG) +26.9%, Novagold Resources (NG) +22.9%, Piedmont Lithium (PLL) +22.8%, Enovix (ENVX) +18%, Hudbay Minerals (HBM) +16.9%, Endeavour Silver (EXK) +16.5%, Taseko Mines (TGB) +16.4%, Foremost Lithium Resource (FMST) +15.5%, Hawaiian Electric (HE) +15.1%.
Top 5 decliners in energy and natural resources in the past 5 days: Altus Power (AMPS) -13%, Petrobras (PBR) -12%, North European Oil Royalty Trust (NRT) -9.9%, FutureFuel (FF) -9.1%, Indonesia Energy (INDO) -8.8%.
Source: Barchart.com
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