Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Oil prices edged higher on Friday and were on track to post weekly gains, with demand growing faster than supply, while vaccinations are expected to alleviate the impact of a resurgence in COVID-19 infections across the globe.

Brent crude futures for September, which expire on Friday, rose 30 cents, or 0.4%, to $76.35 a barrel by 1:38 p.m. ET (1738 GMT).

The more active Brent contract for October was up 47 cents, or 0.6%, at $75.57 per barrel.

Story continues below advertisement

U.S. West Texas Intermediate (WTI) crude futures rose 50 cents, or 0.7%, to $74.12 a barrel.

Both benchmark contracts were headed for gains of more than 2% for the week and small gains for July, the fourth straight monthly increase.

Even with coronavirus cases rising in the United States, all around Asia and parts of Europe, analysts said higher vaccination rates would limit the need for the harsh lockdowns that gutted demand during the peak of the pandemic last year.

“The oil complex has apparently taken a second look at the coronavirus factor in determining that demand will see only a modest reduction, at least one that will prove minuscule in relation to last year’s plunge in consumption,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Analysts pointed to a rapid rebound in India’s gasoline consumption and industrial production following its COVID-19 surge as a sign that economies are more resilient.

Russian Deputy Prime Minister Alexander Novak said oil consumption was increasing across the globe.

“Demand is on the rise, consumption is on the rise. Of course, the coronavirus is still there but … there are no such lockdowns as there were before,” he told reporters.

Story continues below advertisement

U.S. oil giants Exxon Mobil and Chevron reported earnings, and their guidance indicated the market should remain tight, analysts said.

Chevron said it expects to add at least one or two rigs in the Permian basin in the third or fourth quarter and said it was seeing demand for most products, other than international jet fuel, starting to return to pre-pandemic levels.

The number of U.S. oil rigs has risen for 11 straight months, but fell two to 385 this week, data from energy services firm Baker Hughes showed.

“Big oil is not ramping up spending in new wells and focusing on debt reduction, which should keep OPEC+ happy with their steady plan of increasing output,” Edward Moya, senior market analyst for the Americas at OANDA said.

“OPEC+ is not losing market share to the U.S., which should mean the oil market is still poised to go much higher.”

A Reuters survey found OPEC oil output rose in July to its highest since April 2020, as the group further eased production curbs.

Story continues below advertisement

U.S. crude production rose just 80,000 barrels per day in May to 11.23 million bpd, according to a monthly government report.

Still, oil prices will trade near $70 per barrel for the rest of the year supported by the global economic recovery and a slower-than-expected return of Iranian supplies, with further gains limited by new coronavirus variants, a Reuters poll showed.

Top oil exporter Saudi Arabia is expected to raise crude prices for sales to Asia in September for a second straight month, tracking strength in Middle East benchmarks, trade sources said.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies