Oil prices were up early on Friday, set for another week of gains. With a strong demand for natural gas and coal supply for the winter, the U.S. benchmark reached $80 per barrel.
WTI Crude was up 2.03% at $80.05 as of 10:29 a.m. EDT on Friday, and the international benchmark, Brent Crude, advanced 1.76% to $83.39. Due to a restricted supply and rising demand, oil prices were expected to gain 4% this week. Additionally, due to a gas-to-oil switch as natural gas prices were a record-high in Europe and Asia.
This week’s oil price rally was kick-started by the OPEC+ group after it decided on Monday to keep plans for easing the cuts unchanged, despite calls for more supply from consuming countries, including the United States.
In November, OPEC+ will increase supply by 400,000 barrels per day (bpd). That is the minimum the market was expecting ahead of the meeting. WTI Crude prices hit their highest level in seven years, as a result of the decision.
On Wednesday, oil settled lower after the EIA reported a crude inventory build. Also, energy prices fell globally, following Russian President Vladimir Putin’s suggestion that Russia could increase natural gas supply to Europe this winter.
Reports said that the U.S. Department of Energy was walking back previous comments that it was considering a release of the Strategic Petroleum Reserve and a ban on crude oil exports. This report led prices to reverse losses on Thursday. Early on Friday, tighter energy supply ahead of the winter continued to boost oil prices.
Energy ETFs Rebound
Meanwhile, oil sector-related exchange traded funds regained strength after the U.S. said it had no plans to release the country’s oil reserves to dampen rising gas prices.
On Thursday, the ALPS Alerian MLP ETF (NYSEArca: AMLP) increased 1.8%. Moreover, the JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) rose 2.0% and the Energy Select Sector SPDR Fund (NYSEArca: XLE) gained 0.8%.
The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, was up 2.2% on Thursday. At the same time, the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, was up 2.1%.
WTI crude oil futures rose 1.9% to $78.9 per barrel and Brent crude climbed 1.7% to $82.5 per barrel.