Oil rose to briefly top $73 a barrel on Friday, supported by growing signs of supply tightness in the United States because of Hurricane Ida and as US-China trade hopes gave riskier assets a boost.
About three quarters of the US Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August.
That is roughly equal to what OPEC member Nigeria produces.
Phil Flynn, senior analyst at Price Futures group in Chicago, said: “The market is back to focusing on the tighter supply situation globally, and that is giving it a boost.
“While China is releasing oil from its strategic petroleum reserve, the amount is more than offset by reduced production in the Gulf of Mexico.”
Brent crude rose to settle at $1.47, or 2.3 percent, to $72.92. The session high was $73.15 a barrel. US West Texas Intermediate crude rose $1.58, or 2.3 percent, to $69.72.
Both grades posted a small gain on the week. Brent has rallied 41 percent this year on supply cuts by OPEC and some demand recovery from the pandemic.
Oil and equity markets also got a boost from news of a call between US President Joe Biden and his Chinese counterpart Xi Jinping. The call raised hopes for warmer relations and more global trade, analysts said
“The Biden-Xi phone call has had the same effect on oil markets as it has on other asset classes,” said Jeffrey Halley, analyst at brokerage OANDA.
The United States added rigs in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks.
On Thursday, both crude contracts fell more than 1 percent after China said it would release crude oil reserves via public auction to help ease high feedstock costs for refiners.
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