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by Stockwatch Business Reporter
West Texas Intermediate crude for July delivery added 99 cents to $33.49 on the New York Merc, while Brent for July added $1.10 to $35.75, its first time closing above $35 (U.S.) in 10 weeks (all figures in this para U.S.). Prices climbed on bullish U.S. inventory data, as the U.S. Energy Information Administration reported a five-million-barrel drop in weekly inventories, counter to analysts' predictions of a 2.4-million-barrel increase. Western Canadian Select traded at a discount of $8.85 to WTI, down from a discount of $8.35. Natural gas for June lost six cents to $1.77. The TSX energy index added 4.32 points to close at 81.92.
"We are at the start of another multiyear oil bull market," came the enthusiastic prediction this morning from Scotia Capital analyst Michael Loewen. In a 15-page research note about "The Road to Recovery," Mr. Loewen highlighted the reasons for optimism, even as he cautioned that near-term supply and demand -- particularly over the next six months -- "may be a bit turbulent and dependent on government policies concerning COVID-19 economic lockdowns." Oil bulls can still take heart from the "noticeable" spike in fuel demand in key markets. In the United States, even though many states remain in lockdown, demand has started to recover, while in China, traffic congestion data show that "nearly all major cities" (Beijing, Shanghai and others) "are now back to, and in some cases exceeding, 2019 levels." Global storage pressures are also easing as inventories begin to drain.
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