Baku, Azerbaijan, April 6
By Leman Zeynalova – Trend:
Oil prices rose for the sixth consecutive week, bolstered by reports that a US-China trade deal may soon materialize, Trend reports citing Capital Economics, UK-based consulting company.
“The boost to the price of WTI outpaced Brent crude, although the spread remains well above the 5-year average. While the reason for the divergence is tricky to isolate, there may have been some profit-taking as Brent flirted with $70 per barrel. Going forward, we maintain that concerns over lacklustre demand and elevated US supply will weigh on prices,” reads an analysis by Capital Economics.
The price of European coal plummeted by around 20 percent on the week, owing to warmer weather and a corresponding build in stocks, according to the company’s estimates.
“Elsewhere, spot Asian LNG prices ticked up, after tumbling by 52 percent since the start of 2019. While prices may continue to climb steadily higher, we think excess supply is a structural issue which should keep average annual Asian LNG prices markedly lower in 2019-20 than 2017-18,” reads the analysis.
“All the signs are that US-China trade talks are progressing well. On Friday, there were even media reports that the two sides had agreed timelines for implementing a deal. Given the good news on trade, some more upbeat economic data and the apparent strength in investor risk appetite, it is somewhat surprising that the prices of most industrial metals fell this week. We think the muted reaction perhaps reflects that these positive developments had already been factored in to prices.”
Turning to next week, confirmation that a US-China is imminent could give a general lift to commodity prices – perhaps with the exception of gold – even if it proves short-lived, said the consulting company.
Follow the author on Twitter: @Lyaman_Zeyn