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Oil Price Fundamental Daily Forecast – Recovers from Early Setback Caused by Drop in China’s April Oil Imports

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U.S. West Texas Intermediate and international-benchmark Brent crude oil futures nudged higher on Friday after posting a two-sided trade. Nonetheless, there was enough strength generated early in the week to offset a small decline from Wednesday, leading to a more than 2% weekly gain.

On Friday, June WTI crude oil settled at $64.90, up $0.19 or +0.29% and July Brent crude oil finished at $68.28, up $0.19 or +0.28%.

Both Brent and WTI closed higher for a second consecutive week as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

China’s April Oil Imports Fall 0.2% Year over Year as Refining Margins Narrow

China’s crude oil imports in April fell 0.2% from a year earlier as refiners curbed production to relieve a squeeze in profit margins brought about by rising crude oil prices and bulging inventories.

The world’s biggest crude oil buyer brought in 40.36 million tonnes of crude oil in April, or 9.82 million barrels per day (bpd), data from the General Administration of Customs showed on Friday. That was the lowest since December and was down from 11.69 million bpd of imports in March.

“We expect imports over May-June to be higher than what the market previously anticipated. Crude imports should rise to 11.0-11.5 million bpd levels in August-September, with the ramp up of new refining capacities,” said Chen Jiyao, head of China client advisory at energy consultancy FGE.

Friday’s data also showed China’s refined fuel exports fell 14.8% over April 2020 to 6.82 million tonnes, despite the bulging inventory at dominant state refiners.

US Drillers Add Oil and Gas Rigs for Second Week in a Row – Baker Hughes

U.S. energy firms added oil and natural gas rigs for a second week in a row as higher oil prices prompted some drillers to return to the wellpad.

The oil and gas rig count, an early indicator of future output, rose eight to 448 in the week to May 7, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

That put the total rig count 74 rigs, or 20%, higher than this time last year. It was also up 84% since falling to a record low of 244 in August 2020, according to Baker Hughes data going back to 1940.

U.S. oil rigs rose two to 344 this week, while gas rigs rose the seven, the most in a week since December 2018, the highest since March 2020, to 103.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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