- Oil prices rose for a second day on Friday as the market reacted to falling US inventories, and signs of strong Asian demand from both China and India added support.
- Brent crude oil futures were up $1.43, 1.93%, at $75.55. US West Texas Intermediate futures were up $1.62, or 2.2%, at $74.56.
Historic drop in US oil inventories
“The market is coming to grips with the historic drop in US oil inventories, and dimmed prospects of Iranian oil returning to the market,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
What about prices on both sides?
Still, prices on both sides of the Atlantic ended the week little changed, despite significant daily fluctuations.
Prices were weighed down early in the week by the collapse of output talks between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+.
US crude and gasoline stocks fall
US crude and gasoline stocks fell and gasoline demand reached its highest since 2019, the US Energy Information Administration said on Thursday, signalling increasing strength in the economy.
“A bullish EIA stock report helped the oil market rebound into the black,” said Stephen Brennock of oil broker PVM.
Gains in oil prices
Gains in oil prices were capped by worries that members of the OPEC+ group could be tempted to abandon output limits that they have followed during the COVID-19 pandemic, with talks breaking down because of an impasse between major producers Saudi Arabia and the United Arab Emirates.
Russia was trying to mediate in an effort to strike a deal to raise output, OPEC+ sources said on Wednesday. The United States had high-level conversations with officials in Saudi Arabia and the UAE, the White House said on Tuesday.
“Price wars are almost always quite short-lived – no one wins in the long term,” consultancy Rystad Energy said in a note.
The global spread of the Delta coronavirus variant and worries it could stall a worldwide economic recovery also weighed on oil prices.
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Source: Economic Times
