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Oil declined amid Russia’s plans to boost upcoming overseas oil sales and as the US dollar rallied.
Futures in New York ended the session nearly 1 percent lower on Friday.
Russia is to increase its oil exports 3 percent in the fourth quarter of this year, Interfax reported.
Meanwhile, gains in the US dollar reduced investor interest in commodities priced in the currency.
“There’s been demand destruction starting with higher prices across energy markets broadly and there’s Russian’s plans to raise its global oil sales,” CIBC Private Wealth Management senior energy trader Rebecca Babin said.
Despite falling 0.9 percent US$71.97 a barrel on Friday, West Texas Intermediate crude for September delivery gained more than 3 percent this week due to tightening supplies.
Brent crude for October delivery on Friday fell 0.4 percent to US$75.34 a barrel, but added 3.3 percent for the week.
In the US, crude inventories tumbled to the lowest level since 2019 and fuel supplies also fell, government data showed this week.
Investors have been tracking strong rallies in other energy commodities as well, especially natural gas, which has surged by about 45 percent so far this quarter and spurred the prospect of fuel switching.
However, as prices climb there are increasing signs governments are growing uneasy with the knock-on effects. US President Joe Biden said on Thursday that his administration is looking into high gasoline prices, while China said this week that it would sell oil from its strategic reserve.
Growing supply tightness has made crude markets more backwardated, bullish pattern with near-dated prices more expensive than those further out.
Meanwhile, products like propane that are used in heating and rally seasonally in the winter are trading at multiyear highs as natural gas prices surge.
“Fundamentals have gotten better and as long as they continue to improve, oil prices will rise,” said Peter McNally, global head of industrials, materials and energy at Third Bridge. “We have not hit a ceiling yet.”
With the focus on high energy prices across Europe, the International Energy Agency executive director Fatih Birol said gas prices could remain high for weeks to come on strong demand.
He also said he would be surprised to see oil above US$100 a barrel, despite a strong rebound in demand this year.
