# Oil edges up but on track for big weekly drop on supply concerns
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-07-16
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Prices Edge Up Despite Supply Concerns
Meta Description: Stay informed with the latest oil market trends as prices fluctuate due to supply concerns and rising coronavirus cases impacting demand.
URL: https://financedigest.com/oil-edges-up-but-on-track-for-big-weekly-drop-on-supply-concernshtml

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By Scott DiSavino

NEW YORK (Reuters) -Oil edged up after turning positive in volatile trade on Friday following supportive U.S. economic news, but prices were on [track to decline this week](https://www.financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010.html "The Nasdaq 100 On Track to Have its Best Week Since March 2010") as expectations for more supply and a rise in coronavirus cases that raised demand concerns.

Brent futures rose 31 cents, or 0.4%, to $73.78 a barrel by 11:52 a.m. EDT (1552 GMT), while U.S. West Texas Intermediate (WTI) crude rose 38 cents, or 0.5%, to $72.03. Earlier in the session, both benchmarks were down over $1 a barrel.

Despite the small gains, Brent was on track to drop about 2% for the week, putting it down for a [third week in a row](https://www.financedigest.com/sentiment-among-german-exporters-falls-for-third-month-in-a-row-ifo.html "Sentiment among German exporters falls for third month in a row -Ifo") for the first time since April 2020. WTI was [set to fall](https://www.financedigest.com/oil-prices-set-for-weekly-fall-on-stockpile-releases.html "Oil prices set for weekly fall on stockpile releases") about 3% this week, putting it down for a second week in a row.

U.S. [retail sales unexpectedly increased in June as demand for goods remained strong even as spending](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") is shifting back to services, bolstering expectations that economic growth accelerated in the second quarter.

Saudi Arabia and the United Arab Emirates reached a compromise earlier this week, [paving the way for OPEC+ producers to finalise a deal to increase production](https://www.financedigest.com/virtual-assistance-to-pave-the-way-for-incontinence-products-market.html "Virtual assistance to pave the way for Incontinence Products Market").

The longer it takes for OPEC+ to announce an extraordinary [meeting to vote](https://www.financedigest.com/queen-elizabeth-meets-sturgeon-after-new-push-for-independence-vote.html "Queen Elizabeth meets Sturgeon after new push for independence vote") on the extra barrels, the more it implies other OPEC+ member may also want increases to their baseline quota,” said Bob Yawger, director of energy futures at Mizuho in New York, noting reports Iraq was seeking to increase its baseline.

OPEC+, which [groups the Organization of the Petroleum Exporting Countries with Russia](https://www.financedigest.com/pizza-group-dp-eurasia-sharpens-turkish-focus-as-russia-risk-high.html "Pizza group DP Eurasia sharpens Turkish focus as Russia risk high") and other producers, had earlier failed to agree after the UAE sought a higher baseline for measuring its output cuts.

OPEC, meanwhile, said on Thursday it expects world oil demand to increase [next year to around levels seen before the pandemic](https://www.financedigest.com/living-with-covid-where-the-pandemic-could-go-next.html "‘Living with COVID’: Where the pandemic could go next"), about 100 million barrels per day (bpd), led by demand growth in the United States, China and India.

[Prices also found some support](https://www.financedigest.com/belgium-supports-energy-price-caps-suspending-trading-in-eu-power-crunch.html "Belgium supports energy price caps, suspending trading in EU power crunch") from a near 8 million barrel decline in U.S. crude stockpiles last week.

But the [rise in new coronavirus cases around the world could trigger new lockdowns that could reduce recent bullish oil](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") demand forecasts.

In the United States, Los Angeles County will reimpose its mask mandate this weekend in the latest sign that public health officials are struggling with an alarming rise in [coronavirus cases](https://www.financedigest.com/u-s-coronavirus-cases-hit-new-high-hospitalizations-creep-up.html "U.S. coronavirus cases hit new high, hospitalizations creep up") tied to the highly contagious Delta variant.

Britain [reported its highest number of new COVID-19](https://www.financedigest.com/chinas-tencent-reports-first-revenue-drop-as-gaming-regulations-and-covid-19-bite.html "China’s Tencent reports first revenue drop as gaming regulations and COVID-19 bite") cases in more than six months on Friday, days before the government plans to relax curbs on pubs, restaurants and nightclubs in England and ease requirements to wear masks.

(Additional reporting by Ahmad Ghaddar in London, Aaron Sheldrick in Tokyo and Florence Tan in Singapore; Editing by Marguerita Choy and Louise Heavens)


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