Oil rose below $74 a barrel on Friday, ending the week little changed after rebounding from a sharp drop on Monday, buoyed by expectations that supply will remain tight as demand recovers.
Oil prices and other risky assets fell at the beginning of the week due to concerns about the impact on the economy and demand from the increased cases of the mutated delta strain of Covid-19 in the United States, Britain, Japan and elsewhere.
Brent crude was down 11 cents, or 0.2 percent, at $73.68 a barrel by 0810 GMT, after jumping 2.2 percent on Thursday. US West Texas Intermediate crude fell 18 cents, or 0.3 percent, to $71.73 a barrel, after rising 2.3 percent yesterday. On a weekly basis, Brent crude ended the week stable after falling in the previous three weeks. US crude is also expected to remain stable during the week.
Both contracts fell by about seven percent on Monday, but they made up for all those losses, with investors expecting demand to remain strong and the market receiving support from falling oil stocks and high rates of vaccinations.
Demand growth is expected to outpace supply after an agreement on Sunday between the Organization of the Petroleum Exporting Countries and its allies, part of the OPEC + group, to return 400,000 barrels per day each month from August.
Analysts from ANZ Research said in a report that the market is beginning to feel that the 400,000 barrels per day increase will not be enough to keep the market balanced, and that stocks in the United States and in the OECD countries are declining.