The oil market strengthened over the past week due to quite a lot of world occasions, with the ICE Brent Aug-25 contract settling virtually 5.9% larger. Canadian wildfires supplied help, whereas the market is digesting introduced provide hikes for July from OPEC+. The US jobs report for Might on Friday additionally supplied a lift. In the meantime, the US and China are holding their second spherical of commerce talks in London at present, ING’s commodity consultants Ewa Manthey and Warren Patterson notice.
US market has been extra constructive not too long ago
“It’s no shock that with the market shifting larger, speculators elevated their web lengthy in oil. Speculators purchased 42,496 heaps in NYMEX WTI over the past reporting week, leaving them with a web lengthy of 163,078 heaps as of final Tuesday. This transfer was predominantly pushed by recent shopping for, producing the biggest weekly enhance since early January.”
“Shopping for in ICE Brent was extra modest, with speculators buying 8,813 heaps, leaving them with a web lengthy of 167,763 heaps. The US market has been extra constructive not too long ago, which can be mirrored within the narrowing of West Texas Intermediate’s (WTI) low cost to Brent. The Canadian wildfires, which led to some manufacturing shut-ins, supplied some relative help to WTI.”
“Within the US market, drilling exercise continues to sluggish. Baker Hughes information exhibits that the oil rig depend fell for a sixth consecutive week, the longest interval of declines since mid-2023. The rig depend fell by 9 final week to 442, taking the entire decline over the past 6 weeks to 41. The mixture of elevated OPEC+ output, modest US crude oil provide development and the potential for output declines subsequent yr helps the idead of a narrowing within the Brent-WTI unfold.”
