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Tishwash: Oil rises to four-week high

Oil prices continued their gains on Friday and were on track for weekly gains of about 7% as expectations of oil demand improved and a strong economic recovery in China and the United States offset concerns about rising covid-19 infections.

Brent crude futures rose 30 cents, or 0.5 percent, to $67.24 a barrel at 0551 GMT after rising 36 percent on Thursday.

West Texas Intermediate (WTI) crude futures rose 28 cents, or 0.4%, to $63.74 a barrel, after rising 31 cents on Thursday.

China’s net crude oil imports for 2021 are expected to grow by 3.4% this year compared to 2020 to about 11.2 million barrels per day, according to a unit of China National Petroleum Corporation, the largest oil and gas company.

China recorded a record jump in economic growth of 18.3% in the first quarter of the COV recession earlier last year, although the pace of expansion is expected to decline later in the year.

A strong economic recovery around the world and supply constraints by OPEC and its allies, together dubbed OPEC+, as well as a cautious response to rising prices by the United States. Westpac chief economist Justin Smirk said oil producers were supporting the market.

“We continue to believe that there are clear risks that prices could rise to $70 per barrel before we see a more significant decline,” Smirk said.

The longer prices rise, he said, the more supply is likely to return to the market, and the risk of high COVID-19 situations in places like India and Europe could eventually lower prices.

“Crude oil has moved up this week and a decline is now planned,” said Vandana Harry, energy analyst at Vanda Insights, taking into account the worsening COV developments in some countries.

“India and europe’s major economies need to be reckoned with to complete the picture of oil demand,” Harry said.

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Right now, a strong jump in the United States. Retail sales, low unemployment claims and signs of increased cars on the road have boosted the world’s largest market economy.

“The reopening of the (U.S.) economy has already seen an increase in traffic levels in various states across the country,” ANZ analysts said in a note, adding that India and China are also showing “high levels of congestion.”

Traders are looking to increase the usual summer traffic in the United States from June to August.

“With mileage rising on U.S. highways for the first time since the epidemic, it means we’re on our way to a abundant summer driving season in the United States that could approach the summer of 2019,” Axi’s senior global market analyst Stephen Ennis said in a note.  link

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