Brent crude closed the session at $74.10 a barrel, up 31 cents, or 0.4%, after jumping 2.2% on Thursday. US West Texas Intermediate (WTI) crude rose 16 cents, or 0.2%, to $72.07 after gaining 2.3% on Thursday.
Brent rose 0.7% for the week after falling for three consecutive weeks, while WTI rose 0.4% after falling for two weeks.
Both indicators fell nearly 7% on Monday, but trimmed those losses as investors expect demand to remain strong and the market to be supported by falling oil stocks and rising vaccination rates.
Oil prices rose throughout the week after a strong rebound after Monday’s sharp decline, supported by expectations that supplies will remain tight throughout the year.
The price of oil and other risky assets fell earlier in the week on concerns over the impact on the economy and crude demand from rising COVID-19 Delta variant cases in the US, UK, Japan and elsewhere.
Demand concerns are beginning to be considered exaggerated, and oil prices are rebounding. Despite the expansion in oil supply, the oil market is expected to continue with a slight shortage of supply until the end of the year.
Demand growth is expected to outpace supply, despite Sunday’s agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, to add 400,000 barrels per month (bpd) from August. It is expected that the OPEC+ increase will not be enough to keep the market stable and inventories in the US and OECD countries will continue to fall.
U.S. crude inventories increased by 2.1 million barrels last week, but inventories at the Oklahoma Cushing delivery point for WTI hit their lowest level since January 2020.
Energy services firm Baker Hughes Co (BKR.N) said US oil rigs rose seven this week to 387, the highest level since April 2020. However, the recovery in drilling was moderate as producers acted cautiously.
Some investors still consider the drop in oil and distillates prices to be a buying opportunity, with the expectation that prices will rise.
