Oil prices rose on Friday, extending a rally triggered by production disruptions in the Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it reached the Louisiana coast.
Brent crude futures were up 32 cents, or 0.44%, at $72.29 a barrel by 0619 GMT. WTI crude futures were up 34 cents, or 0.49%, at $69.31 a barrel.
If these gains continue, both indexes will snap weekly losing streaks, despite Brent crude falling below $70 a barrel for the first time since late 2021 on Tuesday.
At current levels, Brent is set for a weekly gain of around 1.7%, while WTI is set for an increase of more than 2%.
The slide to a near three-year low forced a short-term pause at the end of the week as market participants priced in short-term oil supply disruptions caused by Hurricane Francine.
Oil producers assessed the damage on Thursday, preparing to resume operations in the US Gulf amid forecast supply losses from Francine.
UBS analysts predict production in the region will fall by 50,000 barrels per day (bpd) in September from the previous month, while FGE analysts predict it will fall by 60,000 bpd to 1.69 million bpd.
Official data showed that about 42% of oil production in the region had been shut as of Thursday.
But if production delays are short-lived and damage to oil rigs is minimal, those gains could be reversed as the broader demand outlook remains a significant headwind limiting a sustained recovery.
This week, demand expectations remained subdued as both OPEC and the International Energy Agency (IEA) cut their demand growth forecasts, citing economic woes in China, the world’s largest oil importer.
Recent weak Chinese economic data suggests that oil demand in the world’s second-largest economy may remain subdued for longer, while demand in other countries outside China is weak.
Customs data showed on Tuesday that China’s crude imports were 3.1% lower on average from January to August compared with the same period a year earlier.
Weak domestic oil demand in China became a hot topic, compounded by disappointing trade data in August.
Demand concerns have also mounted in the United States. U.S. gasoline and distillate futures traded at multi-year lows this week as analysts highlighted weaker-than-expected demand in the oil-consuming nation.
U.S. oil and fuel inventories rose last week as demand fell sharply, according to data released by the U.S. Energy Information Administration (EIA) on Wednesday.
