Meanwhile, demand recovery continues in China and India: File Image/Pixabay
While oil prices largely benefited this week from the aftermath of Hurricane Ida, on Friday they dipped slightly on worries that a U.S. non-farm payrolls report for August due next week may be weaker than expected.
West Texas Intermediate fell 24 cents to $69.75 per barrel at 0200 GMT, while Brent crude fell 13 cents to $72.90 per barrel.
Due to both benchmarks jumping 2 percent on Thursday, WTI is still on track to climb 1.5 percent for the week, while Brent is headed for a 0.3 percent weekly gain.
Jens Pedersen, senior analyst, Danske Bank
Oil prices continue to trade at relatively elevated levels
The latest from post-Ida, which has caused gasoline prices to rise across the U.S., is that Exxon Mobil Corp. is tapping the U.S. Strategic Petroleum Reserve to revive gasoline production in Louisiana; the White House said in an emailed statement, "This is the first such exchange from the SPR in four years and demonstrates that the president will use every authority available to him to support effective response and recovery activities in the region."
Looking ahead, Stephen Innes, managing partner at SPI Asset Management, remarked, "The focus shifts again to the shape of the demand recovery, with some concern that it will be challenging to keep the market in deficit next year if OPEC+ continues to add supply" - a reference to the Organization of the Petroleum Exporting Countries this week sticking to their plan to add 400,000 barrels per day (bpd) to the market over the next few months.
But Innes's concern is entirely theoretical, considering demand figures have continued to defy surging Covid rates in some parts of the world.
For example, in Asia, considered to be a hot spot for the spread of the Delta variant, China's independent refiners are buying more crude, and gasoline consumption in India is improving.
Demand may also be strengthening due to under reported abatement of Delta in other hot spots, a prime case being Florida, which is now experiencing a significant downward trend in hospitalizations.
Options markets have also demonstrated positive crude sentiment, with the premium of bearish put options for global Brent benchmark over bullish calls this week falling to its narrowest since mid-June - a sign that traders aren't paying as much to protect against falling prices.
Jens Pedersen, senior analyst at Danske Bank, remarked, "Oil prices continue to trade at relatively elevated levels despite OPEC+ reaffirming plans to normalize output and COVID-19 demand woes still present.
"A strong jobs report could reverse the drop in the dollar and hit oil prices."