U.S. West Texas Intermediate and international Brent crude oil futures are trading higher on Friday and for that matter for the week after the latter went on a wild ride the previous session. The markets are being boosted shortly after the regular session opening after a better-than-expected U.S. Non-Farm Payrolls report seems to have taken care of worries over demand and a possible U.S. recession later in the year.
On Thursday, there was a slight divergence in the two futures contracts with Brent hitting $70 per barrel for the first time in nearly five months before settling slightly higher and WTI crude oil struggling most of the session before closing lower.
The volatile price action was fueled by trader reaction to the different fundamental factors driving the price action. Expectations of tight global supply underpinned both futures contracts, however, pressure from rising U.S. production based on Wednesday’s U.S. Energy Information Administration’s weekly inventories report, which showed an unexpected build, helped drive Brent higher and WTI lower.
Brent could continue to outpace WTI over the near-term as supply tightens. Furthermore, the international-benchmark has some catching up to do. Global benchmark Brent has gained 30 percent this year, while WTI has gained 38 percent. Prices have been underpinned by tightening global supplies and signs of increased demand.
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