On the heels of robust economic figures out of the U.S., data from China showed its gross domestic product climbed 18.3 per cent in the first quarter from a year prior as consumer spending beat forecasts.
“The world’s two largest economies are starting to really shine, and despite difficulties in Europe, they’re starting to get vaccinations going as well,” said Edward Moya, senior market analyst at Oanda Corp.
Prices this week escaped the narrow trading range they had been in for nearly a month, with upbeat developments out of the world’s two largest economies helping lift the outlook for demand.
Brent’s nearest timespread was in a bullish backwardation of 48 cents a barrel on Friday, compared with as little as 37 cents on Wednesday.
“We’re closing the gap on gasoline and jet fuel,” said Peter McNally, global head for industrials, materials and energy at Third Bridge.
The 23-member Bloomberg Commodity Spot Index broke out to the highest since late February after hedge funds trimmed their net bullish positions for six straight weeks.
While the oil market is facing an increase in supply in the coming months, although the Organization of Petroleum Exporting Countries said this week that rising demand should allow for global stockpiles to deplete.
Complicating the picture, talks are continuing between Iran and world powers over the revival of a 2015 nuclear agreement, a return to which could see the U.S.
Despite strong recovery signals from China and the U.S., COVID-19 continues to slow growth elsewhere.