Meanwhile, India invests heavily in the future of the commodity: File Image/Pixabay
Yet more signs that demand recovery is ongoing despite fear of the delta variant persuaded traders on Friday to boost oil prices again, propelling two benchmarks to their first weekly gains in three weeks.
West Texas Intermediate rose 16 cents to settle at $72.07 per barrel, while Brent rose 31 cents to end the session at $74.10 per barrel; the increases came after reports that fuel demand and road traffic from the U.S. to Asia and Europe remains resilient, which in turn suggests that demand recovery and shrinking inventories will continue.
This was despite headlines that the Olympics opening ceremony kicked off in a nearly empty stadium in Tokyo, and signs in China that a fresh outbreak in Nanjing has spread to other provinces.
Edward Moya, senior market analyst, Oanda Corp
We're not going to see.....a massive return to strict lockdown
But the ongoing increase in vaccinations across the world (which as of Thursday made a 17 percent dent in a sudden uptick of delta variant infections in the UK) presumably caused Ed Moya, senior market analyst at Oanda Corp., to remark, "The fact of the matter is that we're not going to see, at least in the U.S. and in Europe, a massive return to strict lockdown."
Compared to the historic lows of 2020 and despite persistent forecasts of oil's demise in the hands of renewables, the oil market is faring fairly well in 2021: France's Vital reported on Friday that it has paid a record $2.9 billion to its executives and staff through share buybacks so far this year after it achieved its best ever results ($3.2 billion in net profit) in 2020.
Trading houses including Trafigura Group, Mercuria Energy Group Ltd., and Gunvor Group have also reported record profits.
Meanwhile, Indian Oil Corp. plans to increase its crude processing capacity by a third over the next five years to increase production of gasoline and diesel, along with petrochemicals, according to its chairman Shrikant Madhav Vaidy, adding that this comprised a $13 billion expansion.
Vaidy said, "I firmly believe all forms of fuel will have a place to stay - fossil fuels will be there; there's going to be demand for whatever we invest in, [and] consumption is going from leaps and bounds."
The International Energy Agency has predicted that India's growth in oil consumption will surpass that of China in the mid-2020s, making it an attractive market for refinery investment.