NEW YORK, N.Y. – Oil rose more than five per cent this week, even with a decline on Friday, as traders concluded last week’s dive to a low for the year was overdone.
The price of oil slipped Friday after a report showing that growth picked up in the U.S. economy last quarter, but not as much as expected. Benchmark West Texas Intermediate crude for June delivery fell 64 cents to US$93 a barrel on the New York Mercantile Exchange.
Still, oil rose $4.99 a barrel over the week, with the 5.6 per cent increase the largest weekly gain of the year.
After oil hit a low of $86.68 last week, traders seemed to look for reasons to buy. They found a few: a sharp drop in U.S. gasoline supplies, positive data on U.S. hiring and increased speculation for a rate cut by Europe’s Central Bank.
But the broad economic picture suggests that oil demand will remain constrained in the near term. The U.S. government on Friday estimated that the economy grew at annual rate of 2.5 per cent from January through March. But the markets were expecting growth of three per cent or better. The U.S. figure follows last week’s report of slower-than-expected growth in China.
Brent crude, which is used to price oil from the North Sea used by many U.S. refiners, dropped 25 cents to US$103.16 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex, gasoline rose two cent to US$2.83 a U.S. gallon (3.79 litres), heating oil was flat at US$2.90 a gallon and natural gas lost two cents to $4.15 per 1,000 cubic feet.
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