The market was buoyed by news Thursday that the International Energy Agency doesn't now plan a further oil sale beyond the current move, which released 60 million barrels into the market, the bulk of which came from the U.S. The IEA said the release, needed to cover oil supplies lost as a result of the ongoing Libyan civil war, and higher output from the Organization of Petroleum Exporting Countries, has improved the supply outlook for the second half of the year.
But those barrels will be arriving at refineries as demand for key petroleum products like gasoline remains weak amid rising prices in the peak summer demand season. U.S. data show demand of just over 9 million barrels a day in the week ended July 15 was more than 400,000 barrels a day below a year ago. AAA Daily Fuel Gauge reports said Friday the national average retail price for regular gasoline was $3.695 a gallon, up 2.8 cents from a week earlier.
"There are still a lot of near-term problems. Demand is sluggish. One has to wonder how sustainable is this," said Andy Lebow, a vice president at brokerage MF Global in New York.
August-delivery heating oil futures settled up 2.88 cents at $3.1280 a gallon, the highest level since June 9, while August reformulated gasoline blendstock futures were up 3.06 cents at $3.1301 a gallon.
--Michael R. Crittenden and Jared Favole contributed to this report.