For a sixth week in a row, the price of oil closed the week highe ron Friday as renewed bombing in Yemen underscored how unstable the region has become. New data from the U.S. Department of Energy on crude oil inventories also helped support markets. It is becoming increasingly clear that prices for both WTI and Brent crude touched bottom at the beginning of the year.
- The airstrikes in Yemen continued despite the announcement on April 21 that Saudi Arabia and its allies had ended their military campaign. The hostilities against Shiite militants, which began on March 26, 2015, demonstrate growing instability in the world's most important oil-producing region.
- Meanwhile, Saudi Arabia continues to pursue the same strategy: to maintain output near its all-time high in order to avoid losing market share to producers with higher production costs.
- Even though U.S. inventories are at an 85-year high, the data released on Wednesday showed that U.S. output fell for a second consecutive week. Scaled back drilling operations, combined with the increase in demand forecast for the second half of 2015, should eventually reduce inventory levels.
- Have a good week!
Emmanuel Tessier-Fleury