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U.S. crude oil prices posted a fifth consecutive monthly decline but settled Friday at their highest in three weeks, and improving macroeconomic conditions could maintain upward momentum.
This week’s rally was sparked by the shutdown of ~450K bbl/day of Iraqi oil flows due to a dispute with the Kurdistan region, also supported by milder than forecast U.S. inflation data last month, reinforcing hopes for an end to interest rate hikes from the Federal Reserve.
Concerns about the banking crisis also have eased, reducing fears of a financial crisis that could hit the global economy and oil demand.
Front-month Nymex crude (CL1:COM) for May delivery closed -1.8% in March – capping a 12.5% drop during the five month streak – but +9.2% on the week to $75.67/bbl for its strongest weekly showing since October, and May Brent crude (CO1:COM) settled -4.9% in March but +6.3% this week to $79.77/bbl, its best week since early February.
Meanwhile, Nymex natural gas (NG1:COM) for May delivery ended -19.3% for the month – its fifth monthly decline out of the seven – and -6.1% for the week to $2.216/MMBtu.
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The oil market remains tight, which should eventually lift crude prices as demand continues to recover in China and the supply response remains muted, especially from OPEC+, which will hold its bi-monthly committee meeting Monday to review the oil market.
A top China think tank forecast this week the country’s crude oil demand may expand by more than 5% this year.
Energy won this week’s S&P sector standings, with the Energy Select Sector SPDR ETF (NYSEARCA:XLE) +6.3%.
Top 15 gainers in energy and natural resources during the past 5 days: (NYSE:GATO) +41.6%, (PPSI) +34.3%, (USAU) +28%, (AZRE) +26.4%, (FLNC) +25.4%, (CDE) +20.9%, (NEXT) +20.3%, (NRT) +19.2%, (GNE) +18.6%, (VIST) +17.8%, (SLI) +16.9%, (PLL) +16.8%, (EE) +16.4%, (NGL) +16%, (VTNR) +15.7%.
Top 3 decliners in energy and natural resources during the past 5 days: (DFLI) -27.2%, (CETY) -16%, (BPT) -13.8%.
Source: Barchart.com
