Roundup: Weekly oil prices extend gain momentum

HOUSTON, March 30 (Xinhua) -- Oil prices increased during the week ending March 29, with the price of West Texas Intermediate (WTI) for May delivery up 1.69 percent and Brent crude oil for May delivery up 2.03 percent.

At the end of the week, WTI settled up at 60.14 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude closed up at 68.39 dollars a barrel on the London ICE Futures Exchange. WTI and Brent have increased over 32 percent and 27 percent, respectively, so far this year mainly due to the on-going efforts to curb supply by major oil producers.

During the week, WTI and Brent by and large moved towards same directions except on Monday, when WTI was down 0.22 dollar to settle at 58.82 dollars a barrel while Brent was up 0.18 dollar to close at 67.21 dollars a barrel.

Market fears over global economic slowdown were triggered after the so-called yield curve inverted for the first time in more than a decade in the United States and the downbeat sentiment lingered through Monday. The yield curve inverted again on Monday.

An inverted yield curve happens when short-term rates surpass their longer-term counterparts, which is considered an important indicator of possible economic recession.

On Tuesday, oil prices rose as traders continued to focus on the tightening global supplies. WTI increased by over 1 dollar to settle at 59.94 dollars a barrel, almost touching the 60-dollar level, while Brent crude closed up at 67.97 dollars a barrel.

Oil prices sank on Wednesday after the U.S. Energy Information Administration (EIA)'s data showed an unexpected increase in U.S. crude stockpiles for the previous week, implying weaker demand and more pressure on crude prices. WTI settled down at 59.41 dollars a barrel while Brent closed down at 67.83 dollars a barrel.

On Thursday, oil prices declined again amid U.S. President Donald Trump's remarks on oil production by the Organization of the Petroleum Exporting Countries (OPEC). WTI settled down at 59.30 dollars a barrel while Brent close down at 67.82 dollars a barrel.

In December 2018, OPEC and other major oil producers, including Russia, pledged to cut production by 1.2 million barrels per day in order to prop up prices, effective from January.

Oil prices posted solid gains on Friday as market participants kept an eye on continued signs of tightening global supplies. Weekly data released by oilfield services company Baker Hughes on Friday showed that the number of U.S. oil rigs fell by eight in the week to March 29, bringing the total count down to 816.

Oil prices finished the first quarter with handsome gains, supported largely by the on-going supply cut efforts by OPEC and its allies.

However, a rising U.S. dollar has dragged down the greenback-denominated crude futures, as the U.S. Dollar Index has been keeping uptrend in the last 12 months. The Dollar Index finished the week on its highs near 97.40 key resistance.

The Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in dollars all over the world and a stronger dollar pressures the oil demand.

For the coming week, investors will follow key data including U.S. official employment report, Brexit drama development as well as market speculations about the ongoing trade negotiations between China and the United States.

In the near future, demand growth and geopolitical issues are important factors to affect oil prices. Both OPEC and the International Energy Agency (IEA) believe the world oil demand will keep uptrend in coming years.

In its latest Monthly Oil Market Report released on March 12, OPEC said world oil demand in 2018 was estimated to have grown by 1.43 million barrels per day, down by 0.04 million barrels per day from the previous estimate amid downward revision in both OECD (The Organization for Economic Co-operation and Development) and non-OPEC regions. And it forecast world oil demand in 2019 will grow by 1.24 million barrels per day, unchanged from its previous monthly projections.

As a result, total world oil demand growth is anticipated to reach 99.96 million barrels per day, and the growth is projected to be driven by India, China as well as OECD Americas. Enditem