Crude oil futures settled notably higher on Friday, with the International Energy Agency’s report saying oil demand is likely to increase significantly due to the energy crunch continuing to support prices.
The IEA said on Thursday that the energy crunch will likely boost oil demand by 500,000 barrels per day.
West Texas Intermediate Crude oil futures for November ended higher by $0.97 or about 1.2% at $82.28 a barrel.
WTI Crude oil futures gained about 3.7% in the week, surging higher for an eighth successive week.
Brent crude futures advanced by about 1% to $84.46 a barrel. The contract rose to a high of $85.10 a barrel.
It is expected that jet fuel demand will see a significant increase as the U.S. government has announced that Covid-19 travel restrictions will be lifted for fully vaccinated foreign national from November 8.
Soaring natural-gas and coal prices are pressuring power-generation companies and manufacturers to switch to using oil, a trend that could add half a million barrels a day to global demand, the IEA said in its monthly report.
The IEA said in its latest Oil Market Report that it expects oil demand to rise by 5.5 million barrels per day to 96.3 million barrels per day in 2021, and by 3.3 million b/d to 99.6 million b/d in 2022, slightly above pre-Covid levels.
Oil prices also found support after Saudi Arabia dismissed calls for additional OPEC+ production increases, saying the group’s unwinding of production cuts was protecting the oil market from the wild price swings seen in the natural gas and coal markets.
Data showing a jump in retail sales contributed as well to oil’s uptick. Data from the Commerce Department showed retail sales climbed by 0.7% in September after jumping by an upwardly revised 0.9% in August. Economists had expected retail sales to edge down by 0.2% compared to the 0.7% increase originally reported for the previous month.
A report from Baker Hughes said U.S. energy firms added oil and natural gas rigs for a sixth week in a row. The report said, the oil and gas rig count rose 10 to 543 in the week to October 15, the highest level since April 2020.
The total rig count has increased by 261 or about 0.93% over this time last year.
U.S. oil rigs rose 12 to 445 this week, while gas rigs fell 1 to 98.