Shafaq News/ Oil prices rose onFriday, extending a rally sparked by output disruptions in the U.S. Gulf ofMexico, where Hurricane Francine forced producers to evacuate platforms beforeit hit the coast of Louisiana.
Brent crude futures rose by 34cents, or 0.5%, to $72.31 per barrel by 0322 GMT. U.S. West Texas Intermediatecrude futures rose by 39 cents, or 0.6%, to $69.36 a barrel.
If those gains hold, both benchmarkswill break a streak of weekly declines, despite a rough start that saw Brentcrude dip below $70 a barrel on Tuesday for the first time since late 2021. Atcurrent levels, Brent is set for a weekly increase of about 1.7%, and WTI isset to gain over 2%.
"A previous dip to an almostthree-year low called for some near-term breather to end the week, as marketparticipants price (in) for the disruptions to short-term oil supplies causedby Hurricane Francine," said IG market strategist Yeap Jun Rong in anemail.
Oil producers assessed damage andconducted safety checks on Thursday as they prepared to resume operations inthe U.S. Gulf of Mexico, as estimates emerged of the loss of supply fromFrancine.
UBS analysts forecast output in theregion in September will fall by 50,000 barrels-per-day (bpd) month-over-month,while FGE analysts estimated a 60,000 bpd drop to 1.69 million bpd.
Official data showed nearly 42% ofthe region's oil output was shut-in as of Thursday.
"But if production delays wereto prove to be short-lived and damages to oil platforms were to be minimal,those gains may be unwound, as the broader demand outlook continues to serve asa key headwind to limit any sustained recovery," Yeap said.
Demand expectations remained dismalas both the Organization of Petroleum Exporting Countries and the InternationalEnergy Agency this week lowered their demand growth forecasts, citing economicstruggles in China, the world's largest oil importer.
"The recent run of weakerChinese economic data suggests that oil demand in the world's second largesteconomy may remain subdued for longer, while demand has been soft in othercountries outside of China as well," said IG's Yeap.
China's crude oil imports averaged3.1% lower this year from January through August compared to the same periodlast year, customs data showed on Tuesday.
"Flagging domestic oil demandin China has become a hot topic and was further underlined by disappointingAugust trade data," FGE analysts said in a note to clients.
Demand concerns have grown in theUnited States as well. U.S. gasoline and distillate futures traded atmulti-year lows this week, as analysts highlighted weaker-than-expected demandin the top petroleum consuming country.
U.S. oil and fuel stocks rose lastweek as demand declined sharply, data from the U.S. Energy InformationAdministration showed on Wednesday.
(REUTERS)