Stronger economic data helps lift oil prices
Oil prices are on track for the first weekly gain in a month today with both WTI and Brent crude prices up on Friday. U.S. Department of Energy numbers this week showed another build in U.S. crude oil stocks, but gasoline demand rose, stoking some crude oil price gains.
Data from the EIA last week showed gasoline inventories falling for the first time since early November, suggesting that consumers were looking to put more in their fuel tanks than analysts expected.
“The idea that gasoline demand is actually rising suggests that perhaps the lower prices of crude are actually prompting a greater usage of this product (gasoline),” said Vyanne Lai, oil analyst at National Australia Bank.
Also helping push prices higher was an upward revision to the country’s economic growth for the fourth quarter. Revised data for the final quarter of last year showed the U.S. economy grew at an annualized pace of 1% in Q4, compared with the initial estimate of 0.7%, reports BBC.
Supply disruption in the Middle East easing pressure from rising Iranian output
Supply disruptions in Iraq and Nigeria have collectively taken more than 800 MBOPD off the market, also underpinning prices, reports CNBC. Security issues with the main pipeline carrying crude oil from the Iraqi Kurdish region and force majeure on Nigeria’s Forcados oil has balanced increases from the rest of OPEC.
“That’s quite a lot (of oil) and it’s more than offsetting the increases from Iran,” said Olivier Jakob, managing director of PetroMatrix.
Most analysts are still forecasting that crude oil inventories will continue to grow until early 2017, but the disruptions and increase in gasoline demand are helping the near-term outlook as markets worry about Iran returning to an already oversupplied market.
