Oil prices head for another strong weekly gain as supply worries dominate

Oil prices were higher on Friday and headed for another solid weekly gain as supply concerns returned to the fore.

price action
  • West Texas Intermediate crude for delivery in June CL.1,


    rose $2.36, or 2.5%, to $110.82 a barrel. The contract closed up 0.4% at $108.26 a barrel on Thursday on the New York Mercantile Exchange.

  • July Brent crude BRN00,

    the global benchmark, rose $2.13, or 2.3%, to $113.26 a barrel. The contract ended up 0.7% at $110.90 a barrel on ICE Futures Europe on Thursday.

  • June NGM22 natural gas futures,
    rose 1.5% to $8.923 per million British thermal units. The contract jumped 4.4% to close at $8.783 per million British thermal units on Thursday, its highest since August 1, 2008.

  • June petrol RBM22,
    rose 0.9% to $3.6915 a gallon, while June’s HOM22 heating oil,
    rose 0.6% to $4.068 per gallon.

Market factors

West Texas Intermediate crude and Brent crude were both on course for weekly gains of more than 5%, marking the third straight weekly gain for each, according to FactSet.

“Additionally, the EU’s ban on Russian oil imports and a surprise announcement from the US about the start of filling its SPR [strategic petroleum reserves] already this fall also underpinning the price,” he said.

In Brent, the next level of resistance is the April high around $115 with support at $110, he said.

Analysts said Thursday’s rally in oil was dampened by the sharp sell-off in Wall Street stocks and the strength of the dollar. The latter can act as a headwind for commodities priced in dollars, making them more expensive than those denominated in other currencies.

Lily: This trader predicted the collapse of bonds, the sale of technology and the surge in oil. She sees $260 worth of oil in a year.

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Felix J. Dixon