Positive earnings reports from energy companies and a decline in US crude production led to a rise in oil prices by over 2% on Friday, while fuel demand increased. Brent futures for June delivery rose 1.5% to $79.54 a barrel, while the more actively traded July contract jumped 2.7% to $80.33.
Similarly, US West Texas Intermediate (WTI) crude rose 2.7% to $76.78. Although both Brent and WTI saw daily gains, they declined for a second consecutive week, with Brent posting a fourth straight monthly decline, due to concerns over a possible economic recession and uncertainty over interest rates.
Nonetheless, there were headlines indicating a potential solution to the First Republic banking crisis, and data showing a rise in oil demand and a decline in output. US crude production fell to 12.5 million barrels per day in February, its lowest since December, while fuel demand rose to nearly 20 million barrels per day, its highest since November. Furthermore, EIA data revealed that crude oil and gasoline inventories in the US fell more than expected, as demand for motor fuel picked up ahead of the peak summer driving season.
Despite unchanged rig numbers, the fifth monthly decline in the number of rigs drilling for oil in the US was also observed. Exxon Mobil Corp and Chevron Corp have held the line on cost-cuts implemented during COVID-19 lockdowns, and have enjoyed strong demand. Brent declined by about 3% this week and WTI slid by about 1%, with the former falling by 5% last week and the latter by 6%. However, for the month, Brent fell less than 1% in April, while WTI increased by about 1%, representing the first monthly increase in WTI prices in six months.