U.S. West Texas Intermediate and international-benchmark Brent crude oil futures surged to a new high for the year this week. The markets are being underpinned by the OPEC-led production cuts and the U.S. sanctions against Iran and Venezuela, which have helped tighten the global supply. However, Friday’s spike to the upside is likely being fueled by increased demand for risky assets and firmer U.S. Treasury yields, which have dampened concerns over a U.S. recession later in the year. The catalyst behind the price action is the optimism created by the resumption of the trade negotiations between the United States and China.
Strong First Quarter Performance
Crude oil is set to post its biggest first quarter gain in 10-years. Additionally, WTI futures are in a position to rise for a fourth straight week and are set for a first quarter gain of 31 percent. Brent futures are set to post a gain of 27 percent for the first quarter.
CNBC says, “For both futures contracts, the first quarter 2019 is the best performing quarter since the second quarter of 2009 when both gained about 40 percent.”
Trump Makes Feeble Attempt to Stop Rally
The strong gains this quarter may have prompted President Trump to call for OPEC to boost production to lower prices on Thursday.
“Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!” Trump wrote in a post on Twitter.