Oil prices were headed for a fourth consecutive weekly gain early on Friday as natural gas and power prices are surging globally and supporting the energy complex.
Early on Friday, however, the price of oil was slightly down due to a stronger U.S. dollar and to profit-taking after oil prices settled at a seven-week high on Wednesday.
As of 9:11 a.m. EDT on Friday, WTI Crude was down 0.36% at $72.35 and Brent Crude traded down 0.15% at $75.55.
Oil prices started rising this week thanks to a bullish report from OPEC on Monday. The surge of the Delta variant is set to partially delay oil demand recovery into the next year when robust economic growth and stronger recovery in fuel consumption will see global oil demand averaging 100.8 million barrels per day (bpd) and exceeding pre-COVID levels, OPEC said, raising its 2022 demand forecast by a shocking 900,000 bpd.
Large inventory draws in crude and gasoline stocks in the United States further drove prices higher on Wednesday, when they settled at their highest levels since the end of July.
The overall rally in global energy prices has also supported the price of oil this week.
“The energy sector, including natural gas, is heading for its fourth weekly gain and highest weekly close in seven years. Tighter market conditions, led by Hurricane Ida disruptions to crude oil and natural gas production, have triggered fresh breakouts and technical buying from funds,” Saxo Bank said in a Friday note.
“Demand is also improving as the Covid impacts fade once again, a development that led to IEA to forecast surging demand into yearend,” the bank’s strategists added.
“With Brent and WTI futures having baked in the week’s most bullish development — a second consecutive weekly plunge in US oil stocks across crude and refined products — with seven-week high settlements on Wednesday, prices need a new impetus to pick the next direction,” consultancy Vanda Insights said early on Friday.