Crude oil prices were moving towards an average 2.5% gain for the week ending July 10 after a fall in US crude production, which could potentially draw down some of the oversupply on the market and prop up prices.
The International Energy Agency (IEA) warned of the downside oil price and oversupply risk from a second coronavirus wave. In its monthly oil report, it revised up its inventory forecast to 92.1 million barrels per day (bpd), up 400,000 bpd from last month's outlook, noting a smaller than predicted fall in the second quarter.
International benchmark Brent crude was trading at $41.87 per barrel at 1200 GMT on Friday for a 2.58% weekly increase after it opened Monday at $43.10 a barrel.
American benchmark West Texas Intermediate was at $39.10 a barrel at the same time for a 3% weekly gain after starting the week at $37.96 per barrel.
With lower US crude production from the fall in the number of oil rigs to the lowest level since June 2009 on Monday, oil prices gained with hopes that some of the oversupply would be trimmed on the global market.
The prospect of a second wave of the novel coronavirus (COVID-19), on the other hand, continues to harm the outlook for economic activity and oil consumption around the world.
According to the US Centers for Disease Control and Prevention (CDC) on Friday, a total of 223,230 new coronavirus cases worldwide were recorded while 64,771 new cases were seen in the US on Thursday, which marked the highest single-day record for the sixth time in 10 days.
India, another major oil consumer, posted a record increase in daily cases for three consecutive days: 25,571 on Wednesday, 25,790 on Thursday and 793,802 on Friday.
Oil prices fell mid-week with the prediction of a rise in US crude inventories that investors perceived as a decline in crude demand in the country.
A surprise increase in US crude oil stocks also suppressed oil prices, suggesting that oil demand in the world's largest oil-consuming nation would remain low in the short term.
By Sibel Morrow