Brent crude oil briefly rose above US$73 per barrel on Friday. There are increasing signs that Hurricane Ida has caused tight supplies in the United States, and the US and China heads of state calls have boosted riskier assets. .
Since late August, about three-quarters of the U.S. Gulf of Mexico’s oil production capacity, or about 1.4 million barrels per day, has been suspended. This is roughly equivalent to the output of the Organization of Petroleum Exporting Countries (OPEC) member Nigeria.
Phil Flynn, senior analyst at Price Futures, said, “The market has refocused on the tightening global supply situation, which has boosted the market.” He added that although China is organizing the release of national reserves of crude oil, the Gulf of Mexico lost production. It greatly exceeds the delivery volume.
Brent crude oil futures rose 1.47 US dollars, or 2.3%, to settle at 72.92 US dollars per barrel, which was as high as 73.15 US dollars during the session. US crude oil futures (WTI) rose 1.58 US dollars, or 2.3%, to settle at 69.72 US dollars per barrel.
Both major contracts rose slightly this week. Brent crude oil has risen 41% this year, due to OPEC cuts in supply and demand has recovered from the pandemic.
The news of the phone call between US President Biden and Chinese President Xi Jinping also gave a boost to the oil and stock markets. Analysts said that this call has ignited hopes of a recovery in relations between the two countries and an increase in global trade.
Energy service provider Baker Hughes said that the number of active drilling rigs in the United States has increased in the past week, indicating that production may rise in the coming weeks.
The focus of attention next week will be OPEC and the International Energy Agency (IEA) revisions to the outlook for oil demand in 2022. Two OPEC+ alliance sources formed by OPEC and its allies said that OPEC may lower its forecast on Monday.