Oil prices rose on Friday over rising demand euphoria after US crude and gasoline oil inventories recorded huge falls although the lack of consensus at the latest OPEC meeting is leaving oil markets without direction.
International benchmark Brent crude was trading at $74.48 per barrel at 0752 GMT for a 0.48% rise after closing Thursday at $74.12 a barrel.
American benchmark West Texas Intermediate (WTI) was at $73.42 per barrel at the same time for a 0.66% increase after it ended the previous session at $72.94 a barrel.
The upward price movement came in response to the hefty drop in US crude and gasoline inventories, which are considered solid signs of a demand rise in the world's largest oil consumer.
Crude oil inventories decreased by 6.9 million barrels last week relative to the market expectation of a 3.9 million-barrel draw while gasoline inventories also recorded a massive drop by 6.1 million barrels to 235.5 million barrels over that period.
"Rising demand against production cuts is a deficit market, so one wouldn't expect falling prices," said Randall Mohammed, former vice president of energy for Ahart Solutions International.
The dispute among OPEC members occurred after the UAE objected to the group's plans to boost output by 400,000 barrels per day (bpd) from August to December. The group also wants to prolong the term of its production cut agreement, which was inked in October 2018, from April to December 2022.
The rapid spread of the COVID-19 Delta variant and the re-emergence of strict measures in some regions raised concerns about economic activity while also fueling fears on the demand side.
Japan extended a state of emergency amid persistent coronavirus cases and announced that the much-anticipated Tokyo Olympics would be held under a COVID-19 state of emergency.
The world’s biggest games are set to begin on July 23 without any international spectators in attendance.
Coronavirus cases in the UK crossed the 30,000 mark on Wednesday for the first time since January, as the Delta variant has become the dominant strain in the UK.
The French government warned of a rapidly approaching fourth wave with the Delta variant strongly spreading across the country.
Fear of a fourth wave is growing in South Korea as the daily virus tally climbed to a record high of 1,275 on Thursday. The rapid spread of the variant is believed to be the reason for the recent surge in infections.
The US Centers for Disease Control and Prevention (CDC) said late Wednesday that infections are increasing, especially in the southern, midwestern and western regions of the US.
"The 7-day average of daily new cases is 13,859, up 10.8% from the week before," it said on Twitter.
The number of people who lost their lives from the virus in the US surpassed 600,000 on June 15 and has now climbed to 606,475, according to the latest tally from Johns Hopkins University.
While India ranks second with more than 405,9370 deaths, Brazil is third with 530,179, as of Friday.