Oil prices were closing in toward $60 a barrel early on Friday, set for the biggest weekly gain since October, while the U.S. natural gas price jumped above $3 per million British thermal units (MMBtu) as a cold snap sweeps across the United States.
As of 9:14 a.m. ET on Friday, WTI Crude prices were up 1.30 percent at $57.02, while Brent Crude was trading at $59.60 per barrel, up 1.22 percent on the day and nearing the $60 threshold.
Supported by a tightening market and increased risk appetite, oil prices were on track on Friday to post their third consecutive weekly gain. This week’s gain would also be the largest weekly increase in oil prices since October last year.
The price of oil has rallied by more than 50 percent since October after vaccine approvals and rollouts began in November.
Commenting on this week’s oil price rally, ING strategists Warren Patterson and Wenyu Yao said on Friday:
“With Covid-19 cases now declining in certain regions, including the US and the UK, there will be a glimmer of hope that the worst is now behind us, particularly as the rolling out of vaccinations picks up.”
Natural gas prices are also having a bullish week, as frigid cold is starting to grip the United States and as the latest EIA natural gas inventory report showed a larger-than-expected weekly withdrawal from working gas in storage.
The U.S. Henry Hub price broke above $3/MMBtu on Thursday and continued to gain on Friday, rising 3.00 percent at $3.019 at 9:14 a.m., as natural gas demand in the U.S. is expected to be very high in coming days. Gas prices sank in the afternoon, however, trading at 0.02% down on the day around noon.
“A frigid cold shot will push into the Rockies and Plains today, then spread across the rest of the northern and eastern US this weekend w/ lows of -20s to 20s for strong national demand. A more impressive Arctic blast will follow late next week across the northern and central US w/lows of -30s to 20s,” NatGasWeather.com said on Friday. “Overall, national demand will be HIGH into early next week, then VERY HIGH late next week,” according to the forecast.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Qatar Loses Interest In Europe’s LNG Market
- Russia Is The Biggest Winner In The OPEC+ Deal
- Oil Prices Continue To Rise As Bullish News Mounts