Oil prices to finish week on a strong note

Benchmarks gain more than 11 per cent since Opec+ on July 18 agreed to bring more supply to the market

A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas. Oil prices have gained about 50 per cent since the start of the year as countries press oShow more

Oil prices are expected to show a strong weekly finish, with Brent, the international benchmark, trading above $75 per barrel on the final day of trading.

The benchmarks have gained more than 11 per cent since Opec+ on July 18 agreed to bring more supply to the market.

Brent, under which two thirds of global crude is priced and traded, was up 0.28 per cent, trading at $76.26 per barrel at 5.42pm UAE time. West Texas Intermediate, which tracks US crude grades, was up 0.18 per cent at $73.75 per barrel.

Brent was headed for a strong finish, gaining 3.8 per cent over the course of the week. WTI meanwhile is expected to settle with a weekly gain of 2.3 per cent on Friday.

Both benchmarks clawed back losses amid growing demand for crude, despite higher cases of the Covid-19 Delta variant in several parts of the world.

"The outlook for the recovery remains very positive so oil should remain well supported and I wouldn't be surprised to see crude prices taking a run at those July highs next week," said Craig Erlam, senior market analyst at Oanda Europe.

"Whether it can overcome them may depend on whether investors can bounce back quickly after today's declines," he said.

Oil prices have gained about 50 per cent since the start of the year as countries press on with vaccination programmes and major economies reopen.

Earlier this month, Opec+, led by Saudi Arabia and Russia, extended its agreement until the end of December 2022. The group reached a consensus over the phasing out of 5.8 million bpd of withheld supply after weeks of deadlock and will review the pact at the end of the year.

Oil prices quickly recovered from the fall, and have since clawed back their losses amid indications of higher demand during the second half of the year.