Oil prices rose on Friday as a rebound in global demand was widely expected and a slow recovery for the U.S. Gulf Coast export and refining hub from the hurricane earlier this week looked set to deplete stocks further.
Brent crude futures were up 39 cents, or 0.5%, to $73.42 a barrel at 1231 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 21 cents or 0.3% at $70.20 a barrel. Both benchmark oil contracts were largely steady for the week.
About 1.7 million barrels per day of oil production remains shut in the U.S. Gulf of Mexico, with damage to heliports and fuel depots slowing the return of crews to offshore platforms, sources told Reuters.
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“The prolonged U.S. Gulf production and Louisiana refining capacity outages, which are bound to carve a bigger hole in the already diminished U.S. oil stockpiles, as well as data showing continued strong domestic fuel demand recovery are supportive factors,” said Vandana Hari, energy analyst at Vanda Insights.
Some analysts see room for further price gains amid tightening crude supplies and signs of recovering demand after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, stuck to a plan to add 400,00 barrels per day (BPD) to the market over the next few months.
The United States welcomed the move and pledged to press the exporter club to do more to support economic recovery by unleashing production.
“With an oil market still strongly in deficit for the remainder of the year, oil seems poised to rally further as OPEC+ signals discipline in easing cuts and as U.S. stockpiles continue to decline,” said Edward Moya, senior market analyst at OANDA.
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Courtesy: Reuters