Oman Daily Observer

Oil heads for third week of gains as supply tightens

- — Reuters

LONDON: Oil prices declined on Friday to $77 a barrel, holding near a three-year high as they headed for a third straight week of

gains, supported by global output disruption­s and inventory draws.

The rally was slightly dampened by China’s first public sale of state crude reserves.

Brent crude was down 27 cents, or 0.35 per cent, at $76.98 a barrel by 1312 GMT, after earlier rising as high as $77.74, its highest since July 6, and close to its highest since October 2018.

US oil was down 40 cents, or 0.55 per cent, at $73.15 a barrel, having closed 1.5 per cent in the previous session, the highest since the start of August.

Oil prices have been supported in recent weeks by major disruption­s in US Gulf Coast production following Hurricane Ida and other storms, disruption­s which could last for months in some cases, that have led to sharp draws in US and global inventorie­s.

US oil refiners on the hunt for replacemen­ts for the Gulf crude have turned to Iraqi and Canadian oil, analysts and traders said.

Some members of the Organizati­on of the Petroleum Exporting Countries 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.

Brent oil prices could hit $80 a barrel by the end of September due to stock draws, lower Opec production and stronger demand in the Middle East, analysts at UBS said in a note.

“What still might allow Brent to hit that mark over the coming weeks is the ongoing drop in oil inventorie­s driven by unplanned supply disruption­s.”

The gains were neverthele­ss capped by China’s first public sale of state oil 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.

 ?? ?? A worker collects a crude oil sample at an oil well operated by Venezuela’s state oil company PDVSA in Morichal.
A worker collects a crude oil sample at an oil well operated by Venezuela’s state oil company PDVSA in Morichal.

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