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Futures Movers: Oil climbs, with U.S. prices on track for a 9th straight weekly gain

Oil futures climbed on Friday, with U.S. prices on track to score a ninth straight week of gains on the back of easing travel restrictions, a slow recovery in U.S. crude production and expectations for higher energy demand for the holidays.

“Oil continued its three-month rally of almost 30% as COVID peaked and the U.S. opened up travel to vaccinated travelers,” Jay Hatfield, chief executive officer at Infrastructure Capital Advisors told MarketWatch. “We expect oil to continue its rally as we head into November and colder weather triggers more demand for heating oil, and the holidays drive incremental gasoline demand.” 

Infrastructure Capital Advisors expect oil to trade in the $80-$100 range in 2022, citing “incremental demand related to international travel and incremental demand from fuel switching, as global natural-gas prices trade at the energy equivalent rate of $180 barrel,” he said.

West Texas Intermediate crude for December delivery


rose 47 cents, or 0.6%, to $82.97 a barrel on the New York Mercantile Exchange. Prices for the front-month contract are on track for a 1.5% weekly rise.

December Brent crude

the global benchmark, was up 43 cents, or 0.5%, at $85.04 a barrel on ICE Futures Europe, headed for a 0.2% weekly advance.

WTI earlier this week closed at a seven-year high, while Brent has traded at its highest in three years.

Crude pulled back Thursday as natural-gas prices retreated following weekly U.S. data that showed a larger-than-expected climb in domestic storage of the fuel. News that China would make moves to roll back record coal prices had also put some pressure on oil in early Wednesday dealings, before data showing a surprise fall in U.S. crude stockpiles lifted prices.

Global oil inventory levels “remain tight as demand growth remains firm but production growth lags,” said Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch. The Organization of the Petroleum Exporting countries and their allies are “sticking with planned monthly increases of 400,000 [barrels per day] while U.S. production actually fell last week and has only been recovering from the pandemic at a slow pace.”

The recent leg higher for crude to multiyear price highs has come in sympathy with a surge in natural gas. Rising natural-gas prices have prompted increased demand for crude, particularly in China and other Asian countries, as utilities switch gas- and coal-powered generators to oil.

Energy commodities “can’t go up every day and we can expect this sector to remain volatile. But the bottom line is that supply remains limited and demand is robust, and if we get an early and cold start to winter, we should be prepared for much higher energy commodity prices,” said analysts at Sevens Report Research in Friday’s newsletter.

November natural-gas futures

were up 2.6% at $5.246 per million British thermal units, but were on track for a 3% weekly decline.

Rounding out action on Nymex, November gasoline

fell 0.1% to $2.478 a gallon, trading around 0.3% lower for the week. November heating oil

shed 0.1% to $2.546 a gallon, down about 1.1% for the week.

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