NBK's weekly report

National Bank of Kuwait (NBK)
National Bank of Kuwait (NBK)

KUWAIT, May 7 (KUNA) — A specialized economic report said on Saturday that April saw oil markets shrug off the failed OPEC/Russia output freeze accord and propel prices to their biggest monthly gain since 2009.
April may come to be known as the month in which oil market sentiment turned perceptibly bullish. Shrugging off the failure of OPEC and Russia to agree on a production freeze, oil prices posted their largest monthly gain in 7 years in April, an NBK report revealed.
By the end of the month, Brent crude, the international benchmark, had surged by almost 22% to close at USD 48.1 per barrel (bbl), its highest level since November 2015. Similarly, West Texas Intermediate (WTI), the US crude marker, ended the month 20% higher at USD 45.9/bbl, the report noted.
Since hitting 13-year lows in mid-January, oil prices have rallied by a remarkable 72% on the back of several bullish signals including the production freeze talks, supply outages among OPEC members, falling US shale production and a depreciating US dollar. Rather than dwell on the inability of OPEC and Russia to agree on restricting oil production at the 17 April meeting in Doha, markets took their cues from the supply disruptions that have come thick and fast since February.
Among the largest oil producers to witness falls in output were Iraq (pipeline explosion), Nigeria (pipeline explosion/force majeure), Ghana (unplanned maintenance) and Kuwait (oil workersآ’ strike).
The geopolitical risk premium, seemingly absent during oilآ’s rapid descent from USD 115/bbl in mid-2014, appears to have resurfaced as a factor in the projections of the oil market.
The risk is all the more acute given the limited spare capacity available among oil producers. Otherwise, the collapse of the Doha talks and the prospect of unfettered crude supplies would have almost certainly led to a price rout.(end).
osj.tg

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