Oil rebounds from 1-week low on global demand hopes

Oil prices rose on Friday, rebounding from a 1-week low hit earlier, thanks to global demand hopes, after OPEC raised its demand forecast for 2022 and after a large drop in the US crude inventories, which overshadowed oversupply concerns as the OPEC Plus alliance is near announcing an output hike.

US crude rose 0.5% to $71.78 a barrel, after opening at $71.46, and hit a low at $71.20, and Brent crude rose 0.7% to $73.64 a barrel, after opening at $73.12, and hit a low at $73.02.

The US crude lost 2% yesterday, and Brent crude fell 1.6%, in the second daily loss, due to growing oversupply fears after Saudi Arabia and the UAE resolved their dispute.

OPEC said during its monthly report that it expects the global demand for oil to rise to its pre-pandemic levels next year, to around 100 million barrels per day, thanks to growing demand in the US, China and India, the world's largest oil consuming countries.

The total US commercial inventories fell to the lowest level since the week ending on January 31, 2020 at 437.58 million barrels, in a positive sign of the US demand levels.

Saudi Arabia and the UAE are near reaching an agreement to allow more supply in the market.

A dispute between the two Gulf countries sparked after the UAE objected to a proposal to increase output by 2 million barrels per day from August to December, and to extend the entire cuts until the end of 2022.