“Energy traders are pushing crude prices higher in anticipation of disruptions in output in the Gulf of Mexico and on growing expectations OPEC+ might resist raising output given the recent Delta variant’s impact over crude demand,” Edward Moya, senior market analyst at OANDA, told Reuters.
Brent futures rose 98 cents, or 1.4%, to $72.05 a barrel, after falling 1.6% on Thursday. US West Texas Intermediate crude futures climbed 93 cents, or 1.4%, to $68.35 a barrel, clawing again a 1.4% loss on Thursday.
For the week, Brent is set to register an increase of practically 11% this week, its largest weekly bounce since June 2020. WTI is headed for a weekly gain of 10%, which might be its strongest rise since August 2020.
Companies began airlifting staff from Gulf of Mexico oil production platforms on Thursday and BHP and BP mentioned they’ve begun to cease production at offshore platforms as a storm brewing within the Caribbean Sea is forecast to barrel via the Gulf of Mexico by the weekend.
Gulf of Mexico offshore wells account for 17% of oil production and 5% of dry production. Over 45% of whole US refining capability lie alongside the Gulf Coast.
The prospect of providing outages helped flip the market around from losses on Thursday, which had been partly spurred by output returning at a Mexican oil platform following a deadly fire.
“The market may have more immediate concerns, with a storm building in the Caribbean. It’s expected to become a powerful hurricane and potentially wreak havoc in the Gulf of Mexico and Texas early next week,” ANZ Research said