Market Close: May 27 Up
May 27th, 2021 by loren
Oil futures finished higher on Thursday, with U.S. prices at their highest since 2018, as some upbeat U.S. economic data boosted prospects for energy demand, prompting prices to stretch their streak of gains into a fifth-straight session.
“The mood in oil got much better after strong GDP data, as well as a great jobs figure,” Phil Flynn, senior market analyst at The Price Futures Group, told Market Watch. The U.S economy expanded at an annualized 6.4% pace in the first quarter unrevised from the prior estimate released last month, while initial jobless claims sank 38,000 to 406,000 in the week ended May 22, down for a fourth week in a row. “Iran is still a wild card but as negotiations drag on the market is getting mixed messages,” said Flynn. At the same time, there is a growing assumption that some members of OPEC+ —the Organization of the Petroleum Exporting Countries and their allies — “may adjust plans based on the latest Iran news,” he said. OPEC+ will hold a meeting on Tuesday to discuss production levels.
West Texas Intermediate crude for July delivery rose 64 cents, or 1%, to settle at $66.85 a barrel on the New York Mercantile Exchange. That was the highest front-month contract settlement since October 29, 2018, according to Dow Jones Market Data. The front-month July Brent crude, the global benchmark, tacked on 59 cents, or 0.9%, to end at $69.46 a barrel on ICE Futures Europe, the highest front-month finish since May 17 of this year. The most active August Brent contract , which becomes the front month after Friday’s session, settled at $69.20, up 47 cents, or 0.7%. WTI and Brent futures have climbed for five sessions in a row, the longest streak of gains since February.
Crude remains stuck in a trading range this week, with support tied to signs of good demand ahead of the kickoff of the U.S. summer driving season this weekend. At 9.5 million barrels a day, U.S. gasoline demand is only a shade below the usual level for this time of year, said Eugen Weinberg, analyst at Commerzbank, in a note. Data from the Energy Information Administration released Wednesday showed weekly declines for domestic crude, gasoline and distillate supplies.
On Thursday, June gasoline rose almost 0.1% to $2.12 a gallon and June heating oil added nearly 0.6% to $2.06 a gallon. The June contracts expire at the end of Friday’s trading.
But upside for oil has been limited by jitters over the potential return of Iranian supply as indirect talks resume aimed at reviving the 2015 Iran nuclear deal after the last round of negotiations saw progress. For the market, “the nuclear agreement with and the U.S. sanctions against Iran will continue to tip the scales, as they will determine whether Iranian oil exports return to the market,” Weinberg wrote.
