Oil climbed above $70 a barrel after three weekly gains as investors tracked a slow recovery in supply in the Gulf of Mexico and the outlook for demand in the fourth quarter.
West Texas Intermediate added 0.6% in early Asian trade after gaining 2.3% on Friday, giving the US benchmark a modest gain for the week. More than two weeks after Hurricane Ida hit a major producing region, nearly half of U.S. Gulf crude oil production has yet to resume, according to the Bureau of Safety and Environmental Enforcement.
According to Goldman Sachs Group Inc., the disruption caused by the storm was an “unusual bullish blow” to the market. Ida was “unique” in having a net bullish impact on America and. global oil balance, due to an estimated drop of 30 million barrels in inventory, the bank said in a September 9 note.
Oil has pushed higher in recent weeks, paring a quarterly decline, as investors counted on a fall from a powerful storm and a recovery in demand from the coronavirus pandemic. The movement of the commodity has intensified with the Organization of the Petroleum Exporting Countries and its allies continuing plans to resume production that had stopped last year.
Later on Monday, OPEC is scheduled to release its latest monthly assessment on worldwide supply and demand as inventory ebbs. Nationwide crude oil reserves in the US have fallen to the lowest level since September 2019.
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