Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International and domestic oil prices rebound from the lows of the week and ended higher.
Prices started the week lower as traders weighed prospects for demand amid the spread of the delta variant of the coronavirus that causes COVID-19.
Additionally, reports of a crackdown by China on crude importers also contributed to price pressures.
According to a Reuters report, Beijing's crackdown on the misuse of import quotas combined with the impact of high crude prices could see China's growth in oil imports sink to the lowest in two decades in 2021, despite an expected rise in refining rates in the second half.
However, after the initial weakness prices witnessed a rebound as expectations of demand growing faster than supply and vaccinations expected to alleviate the impact of resurgence in COVID-19 infections across the world.
Additionally, data from information provider Genscape indicated that the inventories at the Cushing, Oklahoma storage hub have continued to draw. Cushing stockpiles were seen at 36.299 million barrels this week, down 360,917 barrels from July 23.
Crude inventories fell by 4.1 million barrels in the week to July 23, the U.S. Energy Information Administration (EIA) said, helped by lower imports and a decline in weekly production.
Gasoline stocks also dropped bringing them largely in line with pre-pandemic levels.
Gasoline product supplied, a measure of demand, has reached a four-week average of 9.5 million barrels per day, the highest levels since October 2019, according to EIA data.
According to data from energy services firm Baker Hughes U.S. energy firms cut the number of oil rigs by 2 units to 385 this week.
Money managers raised their net long U.S. crude futures and options positions by 3,478 contracts to 323,745 in the week to July 27, data from the U.S. CFTC showed.
The market could remain range bound next week.
Higher output from both OPEC+ and the U.S. could cap upside.
OPEC and its allies have pumped 26.72 million barrels per day (bpd), up 610,000 bpd from June's revised estimate as the group further eased production curbs under a pact with its allies and top exporter Saudi Arabia phased out a voluntary supply cut.
Additionally, U.S. crude production rose just 80,000 barrels per day in May to 11.23 million bpd, according to a monthly government report.
However, oil prices could continue to remain stronger for the rest of the year supported by the global economic recovery and a slower-than-expected return of Iranian supplies, with further gains limited by new coronavirus variants.
Investors will also await inventory data next week.
On the charts, WTI Crude Oil holds immediate support near 21-Daily Moving Average which is placed at $72.48 level above which will continue its bullish rally up to $74.25-$76.80 levels. Support is at $72.55-$71.35 levels.
Domestically, MCX Crude Oil will continue its bullish momentum above 5400 level up to 5620-5730 levels. Support is at 5430-5350 levels.
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