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Oil prices rose on Friday on growing signs of tightness in US markets after Hurricane Ida hit offshore output, although benchmarks were heading for weekly losses of nearly 1% after China announced plans to sell crude from its strategic reserves.
Brent crude futures for November rose 63 cents, or 0.9%, to $72.08 a barrel. US West Texas Intermediate crude futures for October was at $68.65 a barrel, up 51 cents, or 0.8%. Brent is headed for a second straight weekly loss, Reuters reported.
Both contracts fell more than 1% on Thursday to settle at their lowest since Aug. 26 after China said it would release crude oil reserves here to the market via public auction to ease the pressure of high feedstock costs on domestic refiners, in a move that was described as a first.
Some analysts said the announcement had likely been made to confirm the sale of reserves in July and August.
“While this sale likely weighed on China’s crude imports this summer, alongside depleted teapot import quotas, we expect limited further draws in China’s onshore crude inventories this year and a resumption of higher imports into yearend as demand picks up seasonally and following the recent Covid-19 outbreak,” Goldman Sachs analysts said in a note.
Energy Aspects analyst Liu Yuntao said the release from the reserve came as Chinese majors had to replace supplies they had bought for September and October loadings from Shell in the US Gulf of Mexico.
