Oil prices end week above $100

Oil prices rose at the end of the week with US crude contracts returning above the US$100/barrel level.
The minutes from the latest meeting of the Federal Open Market Committee showed that the policymakers discussed the exit strategy from the economic stimulus programme, triggering speculation that the Fed could tighten monetary policy sooner than expected. The FOMC minutes lifted the US dollar and pushed down oil prices as an increase in the Fed’s ultra low interest rates and withdrawal of the stimulus programme could dent energy demand.
However, president of the Federal Reserve Bank of Chicago Charles Evans said later in the week that the current loose monetary policy had to be retained for some time and no changes were warranted.
This week’s inventories data provided support for oil prices. Wednesday’s report from the US Department of Energy revealed a 15,000 barrel drop in US crude oil stockpiles. Analysts were expecting to see a gain of over 1.5 million barrels.
The bullish supply data was offset by statements from the International Energy Agency (IEA), which encouraged oil producers to raise output. The agency said that despite undergoing a 10 percent correction since 5 May, the prices remained at elevated levels, which could cripple the global economic recovery.
US light, sweet crude for July delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), stood at US$100.10/barrel, while August crude reached US$100.48/barrel.
July Brent crude last traded at US$112.42/barrel on the ICE Exchange.
BP (LON:BP) climbed from 442 pence to 460 pence over the past five days of trading. Fellow supermajor Royal Dutch Shell (LON:RDSB), Tullow Oil (LON:TLW) and Cairn Energy (LON:CNE) were unchanged at 2,150 pence, 1,331 pence and 429 pence respectively. BG Group (LON:BG) rallied from 1,322 pence to 1,378 pence.