Oil prices rose for a second day on Friday as the market reacted to falling US inventories and strong Asian demand from both China and India.
Brent crude futures rose $1.43, or 1.93%, to $75.55 a barrel. West Texas Intermediate (WTI) futures rose $1.62, or 2.2%, to $74.56 a barrel.
U.S. oil and gasoline stocks are falling as fuel demand rises. The historical decline in US oil stocks and the dimmed prospects of Iranian oil returning to the market support prices.
Still, prices on both sides of the Atlantic changed little during the week despite significant daily fluctuations. The collapse of production talks between the Organization of the Petroleum Exporting Countries (OPEC) and its allies put pressure on prices earlier in the week.
The U.S. Energy Information Administration signaled growing strength in the economy, noting that U.S. crude oil and gasoline stockpiles fell and gasoline demand hit the highest level since 2019.
The OPEC+ impasse is fueling uncertainty over global supply.
The possibility that the stalemate among the members of the OPEC+ group might lead them to give up on the production limits they had adhered to during the COVID-19 pandemic has thwarted gains in oil prices. The two Gulf OPEC allies are at odds over a deal that would bring more oil to the market. This caused the interruption of talks between major producers Saudi Arabia and the United Arab Emirates.
OPEC+ sources said on Wednesday that Russia is trying to mediate to reach an agreement to increase production. The White House said on Tuesday that the United States is holding high-level talks with officials in Saudi Arabia and the UAE.
Price wars are always short lived and no one wins in the long run. It is important for the cohesion of the group to reach consensus by creating a controlled space for a little more production.
Meanwhile, fears over rising COVID-19 cases are also deepening. The global spread of the delta coronavirus variant and concerns that it could halt the worldwide economic recovery continue to keep oil prices under pressure.
