Oil prices were mixed on Friday with a strong move after the weak dollar in the previous session and the drop in US crude inventories.
Brent crude futures rose 13 cents, or 0.2%, to $73.16 a barrel at 0619 GMT, while West Texas Intermediate (WTI) crude futures fell 4 cents, or 0.1%, to $69.95 a barrel.
Both benchmark oil contracts were up 2% on Thursday, with WTI on track for 1.8% weekly gains while Brent headed for 0.6% weekly gains.
Oil prices also focused on modest weekly gains ahead of the highly anticipated US monthly jobs report.
The decline in WTI is most likely due to the position traders took ahead of the US nonfarm payrolls report for August. There are concerns that the report may be weaker than the consensus’ estimates.
However, some analysts think there is room for further increases in oil prices as crude oil supplies tighten and signs of recovery in fuel demand.
While the oil market is still holding a strong deficit for the rest of the year, OPEC+’s discipline to loosen cuts and the continued decline in US oil stocks gives hope for oil prices to rise.
We may say on the increase of this week was driven by the lower US dollar which made oil cheaper than other currencies and the Hurricane Ida.
On top of declining US oil inventories, prolonged production cuts in the US Gulf, cuts in Louisiana refining capacity and continued strong domestic fuel demand recovery support market data.
Sources say approximately 1.7 million barrels per day of oil production in the US Gulf of Mexico remains closed, and damage to helipads and fuel tanks has slowed crew return to offshore platforms. Oil demand has been restrained as prolonged power outages have slowed the reopening of closed refineries in Louisiana and offsett the supply effect.
The impact of COVID-19 and demand are main issues to be focused after the Organization of the Petroleum Exporting Countries and its allies adhered to plans to add 400,000 barrels per day (bpd) to the market for the next few months.
