Oil futures finished sharply higher on Friday, continuing a bounce that began the previous session following a sharp drop in U.S. crude and gasoline inventories. Still, they could not fully erase a weekly loss as a spat between key OPEC members remained unresolved, and concerns grew over the spread of the delta variant of the coronavirus, which could slow energy demand in some countries.
On the New York Mercantile Exchange, West Texas Intermediate crude for August delivery CL00, -0.89% CLQ21, -0.89% climbed $1.62, or 2.2 percent, to settle at $74.56 a barrel. On ICE Futures Europe, September Brent crude BRN00, -0.82 percent, the worldwide standard, rose $1.43, or 1.9 percent, to $75.55 per barrel.
WTI and Brent futures both fell by 0.8 percent this week. Crude continued to rise in afternoon trade after Baker Hughes, an Oil-field services business, reported that the number of U.S. Oil rigs increased by two from the previous week to 378. In addition, the number of natural-gas rigs increased by two to 101. After the U.S. Energy Information Administration reported a larger-than-expected decline in crude stockpiles last week and a much larger-than-expected drop in gasoline supplies, the crude complex was raised on Thursday.
However, analysts noted that the upside is restricted due to concerns about COVID-19 and the Organization of Petroleum Exporting Countries and its Allies (OPEC+) inability to agree on output levels. Oil trade has been volatile since OPEC+ discussions broke down on Monday, derailing a plan to gradually remove existing output limitations and allow production to grow by 400,000 barrels per day per month from August to December.The United Arab Emirates has stymied a deal, insisting that it be permitted to increase the quantity of crude it pumps under the initial production restrictions accord. Crude price weakening, according to Tran, reflects traders’ determination to protect profits amid a flurry of volatility.