Oil prices rose more than 3% during the week ending July 30, as a more-than-expected drop in US crude oil inventories signaled a demand recovery while the country’s economic growth rate remained below expectations.
International benchmark Brent crude traded at $74.95 at 1130 GMT on Friday, posting more than a 3.17% rise from Monday when trade at 0727 GMT registered at $72.65 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $73.47 at the same time on Friday, increasing over 3.3% relative to $71.12 a barrel on Monday.
Oil prices came under pressure during the week due to rising COVID-19 Delta variant cases, which raised the possibility of renewed restrictions and thus lower mobility.
The Tokyo Olympics, which was initially planned for the summer of 2020 but was then postponed to this year due to the pandemic, is taking place under the shadow of COVID-19. So far, 198 cases linked to the Olympics have been recorded since July 1.
Nonetheless, positive sentiments in the market came when the World Bank and COVAX, the COVID-19 Vaccines Global Access initiative, revealed their plans to speed up vaccine supplies to developing countries where COVID-19 inoculation rates are lagging far behind those of richer nations.
Through its Advance Market Commitment (AMC) program, COVAX expects to make available up to 430 million more vaccine doses between late 2021 and mid-2022.
Oil prices also found further support after the US Federal Reserve hinted of a bullish economy, which it said is currently COVID-proof.
Investor hopes of greater short-term demand have been raised after the US Energy Information Administration (EIA) announced Wednesday that the country’s crude oil inventories fell by 4.1 million barrels, or 0.9%, during the week ending June 23. With last week’s decline, crude stocks in the country have seen the lowest level since January 2020.
Other US data revealed that the country's economy showed a slight growth rate of 6.5% in the second quarter, remaining lower than the expected 8.5% rate as strong consumption was partially offset by lagging property investments and inventory drawdowns.
By Sibel Morrow