Oil prices rose on Friday as a rebound in global demand was widely expected and a slow recovery for the US Gulf Coast export and refining hub from the hurricane earlier this week looked set to deplete stocks further.
Brent crude futures were up 40 cents, or 0.6 per cent, to $73.43 a barrel at 1105 GMT, while US West Texas Intermediate (WTI) crude futures were up 14 cents or 0.2 per cent at $70.13 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 US Gulf of Mexico, with damage to heliports and fuel depots slowing the return of crews to offshore platforms, sources told Reuters.
“The prolonged US Gulf production and Louisiana refining capacity outages, which are bound to carve a bigger hole in the already diminished US 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 US stockpiles continue to decline,” Edward Moya, senior market analyst at OANDA, said.