Oil futures rose sharply Friday, extending a bounce from the previous session triggered by a sharp fall in U.S. crude and gasoline inventories, but remain on track for a weekly loss as a spat between key OPEC members remained unresolved and worries mounted over the spread of the delta variant of the coronavirus that may slow energy demand in some countries.

West Texas Intermediate crude for August delivery
CL00,
+2.25%

CLQ21,
+2.25%

rose $1.66, or 2.3%, to $74.60 a barrel a barrel on the New York Mercantile Exchange. September Brent crude
BRN00,
+2.04%
,
the global benchmark, was up $1.51, or 2%, at $75.63 a barrel on ICE Futures Europe. WTI was on track for a 0.8% weekly fall, while Brent was off 0.7%.

Crude maintained gains in afternoon trade after oilfield-services company Baker Hughes said the number of U.S. oil rigs rose by 2 from last week to 378. Natural-gas rigs rose by 2 to 101.

“We would argue that the oil market has demonstrated a degree of relative resilience given the bearish headlines this week that centered on macro headwinds, concerns of the delta variant expansion, and a contentious OPEC meeting,” said Michael Tran, analyst at RBC Capital Markets, in a note.

The crude oil complex was lifted Thursday after the U.S. Energy Information Administration reported a larger-than-expected drop in U.S. crude inventories last week and a much larger-than-expected fall in gasoline supplies.

But upside remains limited, analysts said, by concerns over COVID-19 and the inability of the Organization of the Petroleum Exporting Countries and their allies — a group known as OPEC+ — to come to an agreement on output levels.

Oil trading has been volatile after OPEC+ talks collapsed on Monday, derailing a proposal to ease existing output curbs in a controlled manner and allow production to rise by 400,000 barrels a day each month from August through December. The United Arab Emirates has blocked a deal, insisting that it should be allowed to raise the amount of crude it pumps under the initial agreement on production cuts.

In One Chart: OPEC oil stalemate — here’s why U.A.E. is blocking a deal

Tran said weakness in crude oil prices reflected a desire by traders to defend profits amid a flurry of volatility,

“In other words, ‘Given the increased headline risk and directionless volatility, I’ll square my book and recalibrate my position to protect my strong YTD P&L (year-to-date profit and loss) until the demand growth story regains the narrative,’ is a popular view this week,” he wrote.

In product markets, August gasoline
RBQ21,
+1.79%

jumped 1.8% to $2.953 a gallon, while August heating oil
HOQ21,
+1.94%

was up 1.9% at $2.1614 a gallon.

August natural-gas futures
NGQ21,
-0.14%

were up marginaly at $3.689 per million British thermal units.

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