Oil price hits highest in nearly three years as supply tightens, Energy News, ET EnergyWorld

NEW YORK (Reuters) – Oil prices rose for the third week in a row to reach an almost three-year high on Friday as disruptions to global production forced energy companies to remove large amounts of crude from inventories.

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

Brent futures rose 84 cents, or 1.1%, to $ 78.09 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 68 cents, or 0 , 9%, to $ 73.98.

This was the highest close for Brent since October 2018 and for WTI since July 2021, both for a second day in a row.

It was the third week of gains for Brent and fifth for WTI, mainly due to disruptions to production on the US Gulf Coast following Hurricane Ida in late August.

New York Port Ultra Low Sulfur Diesel (ULSD) futures also closed at their highest level since October 2018.

“As oil prices are poised to close out another week of gains, the market anticipates a prolonged impact of supply disruptions and the likely storage needs that will be required to meet refinery demand,” said Louise Dickson, Senior Oil Market Analyst at Rystad Énergie.

Some disruptions could last for months and have already led to sharp declines in US and global inventories. U.S. oil refiners were looking to replace Gulf crude, turning to Iraqi and Canadian oil, traders said.

India’s crude imports hit a three-month high in August, rebounding from the nearly one-year low in July.

Some members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC +, have struggled to increase production due to underinvestment or maintenance delays during the pandemic.

Russia has said it will remain a reliable supplier of energy to world markets. Russian gas giant Gazprom had been accused of doing too little to increase its natural gas supplies to Europe, where prices have skyrocketed.

Iran, which is keen to export more oil, said it would resume talks on resuming compliance with the 2015 Iran nuclear deal “very soon,” but gave no specific date.

Edward Moya, senior market analyst at OANDA, said: “Additional Iranian crude barrels look unlikely to be a 2021 story,” noting that negotiations “will be a long process.”

Kazakhstan’s largest oil producer, Chevron-led Tengizchevroil (TCO), will delay parts of its $ 45.2 billion expansion plan for three to seven months.

In the United States, drillers added 10 oil rigs this week, increasing the number of oil and gas rigs for the 14th consecutive month.

Brent could hit $ 80 by the end of September due to equity drawdowns, lower OPEC production and stronger demand in the Middle East, UBS analysts wrote.

China’s first public sale of state oil reserves capped crude price gains. PetroChina and Hengli Petrochemical bought four cargoes totaling around 4.43 million barrels, sources said.

Analysts also noted that indebted China Evergrande remains a risk to oil prices after the company’s electric car unit warns it faces an uncertain future unless it gets an injection. fast cash flow.

(Additional reporting by Ron Bousso in London and Aaron Sheldrick in Tokyo; Editing by Louise Heavens, Edmund Blair, Emelia Sithole-Matarise and David Gregorio)