By Adedapo Adesanya
The price of the Brent crude finished higher by 31 cents or 0.42 per cent on Friday to sell at $74.10 per barrel as expectations remained that supply will continue to be tight through the year.
On its part, the United States West Texas Intermediate (WTI) crude grew by 16 cents or 0.22 per cent to trade at $72.07 per barrel.
For the week, Brent gained 0.7 per cent after declining for three consecutive weeks, while WTI rose 0.4 per cent after falling for two weeks.
Both benchmarks slumped about 7 per cent on Monday but pared those losses, with investors expecting demand to stay strong and the market to receive support from falling oil stockpiles and rising vaccination rates.
Market analysts noted that despite the expansion in oil supply, the market will remain slightly undersupplied until the end of the year.
This is expected to happen after the deal between the Organisation of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+ to add back 400,000 barrels per day each month from August till December.
The market is counting on the fact that the OPEC+ increase will not be enough to keep the market balanced and inventories in the United States and across some developed countries would continue to fall.
Data from the Energy Information Administration (EIA) released Wednesday revealed a weekly increase in US crude supplies, following eight straight weeks of declines.
Meanwhile, there are concerns that rising global Delta variant infection rates of the coronavirus could undermine the current economic rebound.
Also, oil rigs rose by seven to 387 this week, their highest since April 2020 and for the fourth week in a row, implying a production increase ahead.
Meanwhile, the Bank of America has joined other analysts to give a bullish outcome for crude, noting that Brent will hit $100 per barrel next year.
“We still think the OPEC+ driven dip in crude and distillate prices is a buying opportunity and project Brent will hit $100 a barrel next year, with distillates tagging along for the ride,” it said in a note.
Morgan Stanley had forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021 while Barclays raised its 2021 oil price forecast by $3 to $5 to average $69 a barrel.