Another up week for oil

Another up week for oil with nearly 10% added to both WTI and Brent and this morning has seen another strong start to the week with both putting on around 50 cents. On a purely technical basis this is most encouraging, for WTI breaking above $35 was important and with Brent now above $39 that too is giving scope for further upward movement. Generally economic news and industry data helped on Friday, the NFP was 242/-, higher than expected and people’s thoughts turned again to growth in the USA, whilst news from China albeit hardly positive, showed a dose of realism from the Government. Bourses were up pretty much around the world, with oil rising is it becoming a risk-on indicator? Friday also saw the rig count fall as forecast, overall went below 500, down 13 at 489 and oil was below 400, down 8 at 392, as from now we are in new territory, pretty much nobody under 60 can remember so many units stacked.

The bulls picked up on the physical position in the market being tight, albeit on a short term basis, this is true but by no means takes up any slack at all in the call on Opec. Whilst clutching at straws, Azerbaijan has joined the caravan of love and will freeze production at 830/- b/d this year. I fear that the inventory stats will rain on the parade but in this mood the bulls will brush away any bad news.