UPDATE 8-Oil edges up in weekly rebound on forecasts for tight supplies

Reuters

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    * Weekly gains for benchmarks after 2-3 weeks of losses
    * Crude posted steep loss at start of week on virus fears
    * Market to remain tight despite OPEC+ supply boost
-analysts
    * U.S. oil rigs rise for 4th week but drilling recovery
modest

 (Adds Baker Hughes data, updates to settlement)
    By Devika Krishna Kumar
    NEW YORK, July 23 (Reuters) - Oil prices edged higher on
Friday and for the week after a strong recovery from Monday's
steep slide, underpinned by expectations that supply will remain
tight through the year.
    The price of oil and other riskier assets tumbled at the
start of the week on concern over the impact on the economy and
crude demand from surging cases of the COVID-19 Delta variant in
the United States, Britain, Japan and elsewhere.  urn:newsml:reuters.com:*:nL1N2OZ0GT
    Brent crude  LCOc1  ended the session up 31 cents, or 0.4%,
at $74.10 a barrel after jumping 2.2% on Thursday. U.S. West
Texas Intermediate (WTI) crude  CLc1  settled up 16 cents, or
0.2%, at $72.07, after gaining 2.3% on Thursday. 
    For the week, Brent gained 0.7% after declining for three
consecutive weeks, while WTI rose 0.4% after falling for two
weeks. 
    Both benchmarks slumped about 7% on Monday but pared those
losses, with investors expecting demand to stay strong and the
market to receive support from falling oil stockpiles and rising
vaccination rates.
    "The demand concerns proved to be exaggerated, which is why
oil prices have since recovered. Despite the expansion in oil
supply, the oil market will remain slightly undersupplied until
the end of the year," Commerzbank said in a note.     
    Demand growth is expected to outpace supply after Sunday's
deal between the Organization of the Petroleum Exporting
Countries (OPEC) and allies, collectively known as OPEC+, to add
back 400,000 barrels per day (bpd) each month from August.
    ANZ Research analysts said in a report that the market was
starting to sense the OPEC+ increase will not be enough to keep
the market balanced and inventories in the United States and
across OECD countries would continue to fall. 
    U.S. crude inventories rose by 2.1 million barrels last
week, but stocks at the Cushing, Oklahoma delivery point for WTI
hit their lowest since January 2020.  EIA/S 
    U.S. oil rigs rose seven to 387 this week, their highest
since April 2020, energy services firm Baker Hughes Co  BKR.N 
said. But the recovery in drilling has been modest as producers
favor spending austerity. RIG/U 
    "We still think the OPEC+ driven dip in crude and distillate
prices is a buying opportunity and project Brent will hit $100 a
barrel next year, with distillates tagging along for the ride,"
Bank of America said in a note. 

 (Additional reporting by Alex Lawler in London, Sonali Paul in
Melbourne, Roslan Khasawneh in Singapore and Scott DiSavino in
New York; Editing by Marguerita Choy and Andrea Ricci)
 ((devika.kumar@thomsonreuters.com; +1 646 223 6059; Reuters
Messaging: devika.kumar.thomsonreuters.com@reuters.net))

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