Oil prices closed higher for a third straight session on Friday, supported by ongoing supply concerns from the Western Canadian wildfires, though front month WTI did settle lower week-on-week for the first time in over a month. The market also overcame bearish sentiment from the monthly Government issued employment report, which showed a smaller than expected increase in new jobs for April.
The end-of-week theme, however, was certainly centered on the forest fires, which are estimated to have shut-in up to one million barrels of oil production per day (roughly half of total daily Canadian oil production). Despite the support from these supply disruptions, front month WTI has settled between $43 and $46 virtually every day in the last three weeks.
June WTI meandered through the early part of Friday, losing some ground early after the April employment report but not enough to give the bulls any reason for real pause. After regaining the $44 mark by mid-morning, WTI gradually moved higher during the day peaking just above $45 in the early afternoon (which put oil up about a dollar on the day). At the close, June WTI was up 34-cents at $44.66. It was an odd week for price action: Monday and Tuesday prices were noticeably down (front month WTI lost over a dollar each day), though the market posted small gains each of the last three days of the week (cumulatively, WTI was up a dollar in those three days).
June RBOB and Heating Oil each posted gains of less than a penny on Friday, though for the week both were in the red. NYMEX RBOB was particularly soft, losing 11 cents week-on-week. There is some history to indicate NYMEX RBOB prices peak in May, ahead of the traditional summer driving season, and the recent price dip may be in anticipation of (or a correction to) that history repeating.
Published by PAPCO, Inc. (PAPCO)
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