RIYADH: Oil prices rose to near six-week highs on Monday as US output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.
Those gains came even though the Organization of the Petroleum Exporting Countries trimmed its world oil demand forecast for the last quarter of 2021 due to the delta coronavirus variant.
Oil demand is expected to average 99.70 million barrels per day in the fourth quarter of 2021, down 110,000 bpd from last month’s forecast, OPEC said in its monthly report.
OPEC said a further recovery would be delayed until next year when consumption will exceed pre-pandemic rates.
Brent futures rose 53 cents, or 0.7 percent, to $73.45 a barrel by 11:30 a.m. EDT (1530 GMT), while US West Texas Intermediate crude rose 71 cents, or 1 percent, to $70.43.
That puts Brent on track for its highest close since Aug. 3 and WTI on track for its highest close since July 30.
In addition to the OPEC forecast, other bearish factors also held back oil price gains on Monday, including persistent worries about coronavirus on global crude demand, potential supply increases from planned releases of oil from strategic reserves in the US and China.
A city in China’s southeastern province of Fujian has closed cinemas and gyms, sealed off some entries and exits to highways and told residents not to leave town as it battles a local COVID-19 outbreak.
Traders noted China’s planned release of oil from strategic reserves could boost supplies available in the world’s the second biggest oil consumer.
The US government agreed to sell crude oil from the nation’s emergency reserve to eight companies including Exxon Mobil, Chevron and Valero, under a scheduled auction to raise money for the federal budget.