Oil prices rose on Friday for a fourth straight day due to global supply concerns following powerful storms in the United States, with China’s first public sale of state crude reserves causing a momentary blip in the rise.
U.S. West Texas Intermediate (WTI) was up 16 cents, or 0.22%, at $73.36 a barrel, having closed 1.5% in the previous session, the highest since the start of August.
Brent crude was up 19 cents, or 0.25%, at $77.44 a barrel, after touching two-month high on Thursday and closing at its highest since October 2018.Oil companies in the United States have struggled to fully restore deliveries to the eastern seaboard after storms damaged facilities on the Gulf coast.
“A prolonged recovery from Hurricane Ida disruptions and robust demand are eating into oil stockpiles,” ANZ Research analysts said in a note. ” U.S. oil inventory withdrawals are accelerating.”
In a sign of strengthening fuel demand, capacity utilization rates at U.S. East Coast refineries increased to 93%, the highest since May 2019, Energy Information Administration (EIA) data showed.
Inventories fell to the lowest in almost three years after damage from two hurricanes kept draws elevated in the United States, EIA data earlier in the week showed.
Prices declined briefly on Friday after China’s first public sale of state reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels, sources with direct knowledge of the auction said.
WoodMac analysts said just before the auction that it would have little impact on the market due to the size of the sale relative to China’s consumption and imports.
Some members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, have also struggled to raise output following under-investment or delays to maintenance work during the pandemic that began last year.
Still, U.S. oil refiners on the hunt for replacements for the U.S. Gulf crude lost to storms have been able to turn to Iraqi and Canadian oil, while Asian buyers have been switching to pursuing Middle Eastern and Russian grades, analysts and traders said.