Brent Set To Finish The Week On A Loss

Brent looked poised to end the second week in a row on a loss as it hovered under $109 per barrel on Friday. The commodity traded at $108.95 at 8:20 GMT as tension in Ukraine looked to be easing and global supply increased.

The situation in Ukraine has been making progress as the nation’s newly elected president Petro Poroshenko works to quash the pro-Russian separatist rebellion and restore the country to peace. CNCB reported that Poroshenko may meet briefly with Russian President Vladimir Putin at a gathering in France to commemorate the D-Day landings.

French President Francois Hollande has said that it is his intention to have Putin at least shake Poroshenko’s hand on the sidelines of the commemoration. A small act like that could be the beginning of easing tension between the two sides.

Thursday’s European Central Bank meeting helped limit losses as the bank decided to drop its main interest rates, making its deposit rate negative, as well as prepare a financial stimulus package designed to help kick start the region’s recovery. The bank’s move was more aggressive than investors were expecting, but fell short of the massive stimulus spending packages of the Federal Reserve or the Bank of England.

The spread between Brent and WTI is expected to widen in the future after narrowing to near $6 this week. Despite reports that stocks at Cushing, Oklahoma fell to their lowest since 2008, high refinery utilization rates will likely make it difficult to increase throughput which in turn will lower WTI prices.

Moving forward investors will be looking to key employment data from the US for a better picture of the nation’s economy. Most expect that the number one oil consuming nation’s non-farm payrolls data will show a solid increase in new jobs for May, indicating better demand in the future.