Oil futures post strong weekly gains, Brent, WTI up around 6%

London (Quantum Commodity Intelligence) - Benchmark oil futures rallied by around 6% in the week ending April 16, as a flurry of positive indicators lifted prices for Brent and WTI to the highest levels since mid-March.

North Sea Brent futures for June closed the week $3.82/b higher at $66.77/b, up 5.72% on the week – the strongest weekly gain in outright prices since the week ending January 8. US May WTI futures settled $3.81/b higher at $63.13/b, up $3.81/b – the biggest gain since March 5.

Meanwhile, the keenly watched Brent/WTI spread was little changed on the week at $3.64/b.

US inventory draw down underpins OPEC+ aims 

Prices moved higher following a number of key indicators supporting oil prices, including firm Chinese crude import data, the IEA forecasting a more positive outlook for 2021 and data from the US Energy Information Administration showing a sharp drawdown in crude oil inventories.

Most of the gains came on the Wednesday after the EIA reported a draw of 5.9 million/b of crude in the week ending April 9, exceeding analyst forecasts of around 3 million/b. Market watchers said the figure underpins OPEC's key policy aim in bringing down global inventories, which analysts say are now falling at a rate of around 2 million barrels per day.   

Traders shrugged off lingering concerns over the markets ability to absorb planned increases by the OPEC+ group starting in May. Talks between Iran and the international community aimed at finding a deal over Iran's nuclear ambitions took a back seat, as rising geopolitical tensions in the regions were seen as a supporting factor for oil prices.