Oil futures closed out the first week of the New Year with their first gain in several weeks, mostly on the heels of an announcement that the US and China will go back to the negotiating table next week. While unemployment did increase, the rate was much slower than expected, signaling that Americans are, in fact, returning to work. Calming these recession concerns has helped to lift oil prices to their highest number since the middle of December.
It has been a long time coming but the Energy Information Administration, released their data on Friday—two days late because New Year’s Day fell on a Tuesday—and this data showed that little has changed to US crude oil stockpiles. This marks the second week of stagnation in a row despite growth in petroleum product inventories.
Let’s take a closer look at individual products. The New York Mercantile Exchange shows that West Texas Intermediate futures, for February, are up nearly 2 percent, adding 87 cents to rest at $47.96 per barrel. According to Dow Jones Market Data, front-month contract increased nearly 6 percent for the week while WTI crude futures slid nearly 25 percent on the year.
In addition, ICE Futures Europe shows global oil benchmark Brent crude added about 2 percent, adding $1.11 to reach $57.06 per barrel in March. This contracts looks to settle up, as well, increasing more than 7 percent on the week, a steady improvement from the 19.5 percent loss the international benchmark suffered last year.
What matters most, perhaps, is that both of these benchmark futures showed weekly gains after three consecutive down weeks. In addition to this, though, EIA released data on Friday which demonstrated that domestic crude supplies have inched upward by 7,000 barrels per day. This set the supply for the week of December 28 at more than 414 million barrels.
Some analysts might advise that the positive uptick is a direct response to news, this week, that China’s Commerce Ministry confirmed a US trade officials delegation is definitely set to meet with their Chinese counterparts early next week. This will be the first time the two sides have come together since US President Donald Trump and Chinese leader Xi Jinping agreed upon a 90-day trade truce just a month ago.