HOUSTON, May 4 (Xinhua) -- Oil prices decreased for the week ending May 3, with the price of West Texas Intermediate (WTI) for June delivery down 2.15 percent and Brent crude oil for July delivery down 1.80 percent.
At the end of the week, WTI edged down to 61.94 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude closed down at 70.85 dollars a barrel on the London ICE Futures Exchange. WTI and Brent have increased 36.40 percent and 31.69 percent, respectively, so far this year.
During the week, WTI and Brent moved by and large in the same directions, except on Monday when oil prices posted mixed results as the global markets continued to be jolted by geopolitical tensions, due to tightening U.S. sanctions on Iran's oil, which put global supply in check.
The United States recently ended six months of waivers for Iran's major oil buyers and demanded they stop purchases by May. The decision came following its earlier ban on Venezuela's oil, which continued to play its role in tightening the global supplies and keeping the prices up.
On Monday, WTI was up 0.20 U.S. dollar to settle at 63.50 dollars a barrel, while Brent crude fell 0.11 dollar to close at 72.04 dollars a barrel.
On Tuesday, oil prices increased as investors kept a close eye on the ongoing political volatility in Venezuela. WTI increased 0.41 dollar to settle at 63.91 dollars a barre, while Brent crude rose 0.76 dollar to close at 72.80 dollars a barrel.
Oil prices declined on Wednesday, as the market was affected by a sharp increase in U.S. crude stockpiles, which partly offset the influence over political tensions in Venezuela.
For the week ending April 26, U.S. commercial crude oil inventories surged by 9.9 million barrels from the previous week, which was much more than the market expectation of 1.485 million barrels, implying weaker demand and bearish for crude prices.
On Thursday, oil prices decreased as investors remained worried about a potential supply glut, due to a surge in U.S. crude stockpiles and some OPEC members' response to U.S. sanctions on Iran's oil. Saudi Arabia has said it will increase oil output if needed, so as to offset tightening supplies from Tehran.
On Friday, oil prices increased again as the market was buoyed by a surge in U.S. employment in April and Russia's fulfillment to production cut as pledged in a deal between OPEC and its allies. At the end of April, Russia reduced its oil production by 229,000 barrels per day excluding output under the Production Sharing Agreements (PSA) and 223,000 barrels per day including PSA.
Oil prices have kept gaining momentum since the start of the year due to some geopolitical concerns but the momentum slowed mainly due to soaring U.S. crude inventories.
Moreover, a rising U.S. dollar has dragged down the greenback-denominated crude futures, as the U.S. Dollar Index has been keeping uptrend in the past months, although the index closed down for the week at 97.48.
The U.S. Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in dollars all over the world and a stronger dollar pressures the oil demand.
In the near future, demand growth and geopolitical issues are important factors to affect oil prices. Both OPEC and the International Energy Agency believe the world oil demand will keep uptrend in coming years, although OPEC has revised down demand growth of the world oil market.
According to its April Monthly Oil Market Report, OPEC forecast that for 2019, world oil demand growth is estimated to increase by 1.21 million barrels per day (mb/d), revised lower by around 0.03 mb/d from last month's estimate. This was largely driven by revisions in economic growth expectations for the OECD region in 2019.
In the coming week, the market is watching closely the development of the China-U.S. trade talks. Meanwhile, the ongoing production cuts by OPEC and Russia, as well as the U.S. sanctions on Venezuela and Iran will continue to play their roles in tightening the global supplies, in turn, giving a boost to the prices.