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Oil prices rose 1 percent on Friday and were set for weekly gains after a rally sparked by production disruptions in the U.S. Gulf of Mexico, where Hurricane Frances forced producers to evacuate production platforms.
Brent crude futures rose 72 cents, or 1 percent, to $72.69 a barrel by 1048 GMT. U.S. West Texas Intermediate (WTI) crude futures rose 80 cents, or 1.2 percent, to $69.77 a barrel.
If these gains continue, the two benchmarks will halt a series of weekly declines, despite Brent falling below $70 a barrel on Tuesday for the first time since late 2021.
At current levels, Brent is expected to rise by about 2.3 percent on the week and WTI is expected to rise by 3 percent.
“The tightness in the oil market is due to the continued supply disruption in Libya and the larger than expected outages in the Gulf of Mexico due to Hurricane Frances,” said Giovanni Staunovo, an analyst at UBS.
A weaker dollar also helped support oil. The U.S. currency fell to its lowest level in a week on Friday, making dollar-denominated commodities cheaper for holders of other currencies.
Oil producers conducted damage assessments and safety checks on Thursday in preparation for resuming operations in the U.S. Gulf of Mexico.
Official data showed that nearly 42 percent of crude production in the Gulf of Mexico region was shut down as of Thursday.
UBS analysts expected production in the region to fall by 50,000 barrels per day (bpd) month-on-month in September, while FGE analysts estimated a decline of 60,000 bpd to 1.69 million bpd.
Both OPEC and the International Energy Agency this week cut their demand growth forecasts, citing economic difficulties in China, the world’s largest oil importer.
U.S. oil and fuel inventories rose last week as demand fell sharply, data from the U.S. Energy Information Administration showed on Wednesday.
