Oil hits highest in almost 3 years as supply tightens

Oil prices rose for a third week in a row to a near three-year high on Friday as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.

The rally was slightly dampened by China’s first public sale of state crude reserves.

Brent futures rose 84 cents, or 1.1%, to settle at $78.09 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 68 cents, or 0.9%, to settle at $73.98.

That was the highest close for Brent since October 2018 and for WTI since July 2021, both for a second day in a row.

It was the third week of gains for Brent and the fifth for WTI mostly due to U.S. Gulf Coast output disruptions from Hurricane Ida in late August.

New York Harbor Ultra Low Sulfur Diesel (ULSD) futures also closed at their highest since October 2018.

“As oil prices are on track to close another week of gains, the market is pricing in a prolonged impact of supply disruptions, and the likely storage draws that will be needed to fulfill refinery demand,” said Louise Dickson, senior oil markets analyst at Rystad Energy.