Oil weekly recap, April 7 – April 11

West Texas Intermediate crude rose on Friday and posted its biggest weekly advance this year after strong US consumer sentiment data fanned positive sentiment for the US economy, while gasoline demand jumped to a four-month high in the week ended April 4th. Brent also settled the week higher, but narrowed its premium to WTI as Russia reassured the fulfillment of its obligations on natural gas deliveries for Europe.

On the New York Mercantile Exchange, WTI crude for delivery in May rose by 0.3% to $103.74 per barrel on Friday, the highest close since March 3rd. Prices held in a daily range between a five-week high of $104.44 and $103.01 a barrel. The contract settled the week 2.6% higher, its best weekly performance so far this year.

Meanwhile on the ICE, Brent futures for settlement in the same month fell by 0.12% to $107.33 per barrel on Friday. Prices shifted in a daily range between $107.87 and $106.98 per barrel. The European crude benchmark fell by 0.5% on Thursday, but still managed to settle the week 0.6% higher. Brents premium to its US counterpart shrank further to $3.59 on Friday, the narrowest since September 19th.

US crude extended its weekly gains to the biggest this year after data showed on Friday that consumer sentiment in the United States surged to the highest in nine months in April, fanning positive sentiment for fuel consumption in the worlds biggest oil consumer. The Thomson Reuters/University of Michigan preliminary index of sentiment surged to 82.6, outperforming analysts expectations for a jump to 81.0 from Marchs final reading of 80.0.

On Thursday, the Labor Department reported that the number of people who filed for initial unemployment benefits in the week ended April 5th fell to a seven-year low of 300 000, outperforming analysts expectations for a moderate drop to 320 000 from the previous periods upward revised 332 000.

Also helping push prices up, minutes of FOMC’s latest meeting revealed that the Federal Reserve played down anticipations of some of its own members that interest rates might be raised faster than projected.

According to the release, “several participants noted that the increase in the median projection overstated the shift in the projections. Some expressed concern the rate forecasts could be misconstrued as indicating a move by the committee to a less accommodative reaction function.”

Earlier in the week, US crude prices were pressured by a larger-than-expected build in US crude oil inventories, but losses were checked by a spike in US gasoline demand, a sign of solid consumption ahead of the summer season.

Nationwide crude stockpiles jumped by 4.0 million barrels in the seven days through April 4th to a four-month high of 384.1 million barrels, the Energy Information Administration reported, compared to expectations for a 750 000-barrel jump.

Meanwhile, US refiners supplied 8.81 billion barrels of gasoline per day in the four weeks through April 4th, the highest since January 3rd. Total motor gasoline supplies fell by 5.2 million barrels last week, sharply exceeding analysts’ projections for a 1-million decline. Distillate fuel inventories, which include heating oil and diesel, jumped by 0.2 million barrels, compared to projections to remain unchanged.

Refineries operated at 87.5% of their operable capacity, down 0.2% from the preceding week. Both gasoline and distillate fuel production jumped, averaging 9.4 million and 4.8 million barrels per day, respectively.

Libya, Russia

The International Energy Agency lowered its 2014 global demand forecast amid expectations for a rise in Libyan oil exports next week, pressuring down the oil complex, particularly the Brent benchmark. Libyas state-run National Oil Corporation lifted a force majeure for the eastern port of Hariga on Thursday.

According to last Sunday’s deal between rebels and the central government, Libya’s Zueitina and Hariga ports should have reopened immediately, while the two larger ports, Ras Lanuf and Es Sider, are supposed to be surrendered within the next two to four weeks after more negotiations. Es Sider, the country’s largest port, has a daily capacity of 340 000 bpd, while Ras Lanuf can ship 220 000 barrels per day.

ALso weighing on Brent, Russian President Vladimir Putin guaranteed on Friday that Moscow will fulfill all of its obligations to European customers after threatening a day earlier to disrupt natural gas supplies to Ukraine, and therefore Europe.

However, simmering tensions between Russia and the West remain a source for potential market movement after President Barack Obama and German Chancellor Angela Merkel discussed additional sanctions against Russia.