Crude oil prices were heading Friday for more than a 1% gain for the week ending July 24, as a weakened US dollar has been encouraging oil-importing countries to buy more crude oil, hence stimulating global oil demand.
International benchmark Brent crude was trading at $43.55 per barrel at 1125 GMT for a 1.1% weekly gain after it opened Monday at $43.08 a barrel.
American benchmark West Texas Intermediate (WTI) was at $41.34 a barrel at the same time for a weekly increase of 1.7% after starting Monday at $40.64 per barrel.
The US dollar index has declined for 10 out of the last 11 trading days on international markets, as the US, the world's largest economy, leads globally with the highest number of novel coronavirus (COVID) cases.
The index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell to as low as $94.57 on Thursday, marking its lowest level since September 2018, according to official data.
A weaker US dollar is enticing oil importers to buy more crude oil at cheaper prices, raising demand and supporting and an upward trend in prices.
However, global oil consumption overall remains low as the rapid spread of COVID-19 continues to hamper economic activities around the world, and negatively impacts the global economic outlook for the rest of the year.
The total number of COVID-19 cases in the world surpassed 15.5 million late Thursday, according to the latest data from Johns Hopkins University.
As of Friday, the US was still on top with more than 4 million cases, Brazil followed with more than 2.2 million cases, and India reported almost 1.3 million cases.
- Oversupply worries persist
On the supply side, a surprise increase in US crude oil inventories has brought back that oversupply on the global oil market is likely to remain for at least the third quarter of this year, despite OPEC output cuts.
Commercial crude oil inventories in the US rose by 5.7 million barrels for the week ending July 3, the Energy Information Administration (EIA) data showed on Wednesday, against the market expectation of a 3.1 million barrel decline.
The agreement made with OPEC and its allies last week to curb the crude oil production cut by 2 million barrels per day (bpd) from Aug. 1 onwards adds to worries of an increase in the glut of global oil supply.
The 23-nation group known as OPEC+ has been curbing its crude oil output by a total of 9.7 million bpd from May 1 through July 31 to mitigate the adverse impact of the COVID-19 on global oil demand, however, that level will fall to 7.7 million bpd from August onwards.
By Ovunc Kutlu