Crude futures ended the week on a positive note, driven by expectations of rising petroleum demand during the Memorial Day weekend and optimism surrounding the progress in negotiations to raise the US debt ceiling.
WTI crude futures climbed by 84 cents, or 1.17%, settling at $72.67 per barrel, marking a 1.4% increase for the week. Similarly, BRENT crude futures rose by 69 cents, or 0.90%, closing at $76.95 per barrel, recording a 1.8% gain for the week.
The oil market received a boost when the American Automobile Association announced that an estimated 42.3 million individuals in the United States are expected to travel over the weekend, making it the third-highest number since 2000. This optimistic outlook for travel and increased activity during the Memorial Day weekend instilled confidence in petroleum demand.
Additionally, investors expressed positivity as negotiations regarding the US debt ceiling made progress, with the deadline for potential default on the US debt approaching. The prospect of reaching an agreement between Democrats and Republicans regarding the debt ceiling bolstered market sentiment.
Vladimir Zernov, an analyst at market intelligence firm FX Empire, noted that WTI oil futures experienced a rebound following reports suggesting that Democrats and Republicans are on track to strike a deal on the debt ceiling. This news further contributed to the positive sentiment in the oil market.
In other oil-related news, Baker Hughes, a prominent US oil drilling service, reported that the number of oil rigs operating in the United States and Canada decreased by five compared to the previous week, bringing the total count to 570. The decline in rig count indicates a potential slowdown in oil drilling activities.
Investors and market participants will continue to monitor developments in demand patterns and the progress of debt ceiling negotiations, as these factors hold significant implications for the future trajectory of oil prices.
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Saturday, May 27, 2023