Oil prices resumed its weekly gains on Friday as US halted oil sales from its reserves, OPEC+ supply constraints continue to tighten the market and natural gas is replaced with oil due to record high prices.
International benchmark Brent crude was trading at $82.91 per barrel at 07.00 GMT for a 1.17% increase after closing Thursday at $81.95 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $79.25 a barrel at the same time for a 1.21% gain after ending the previous session at $78.30 per barrel.
After declining over a surprise build in the US crude oil and fuel inventories, the oil prices have resumed their upward movements over reports that the US halted oil sales from its strategic reserves.
The US Energy Department’s remarks came after the US Secretary Jennifer Granholm on Wednesday said the federal government has several tools to cool off rallying energy prices, including a potential release of oil from strategic petroleum reserves and an export ban.
The country had called the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to ramp up the production to cool down the rising natural gas prices, however, OPEC+ decided to keep its output unchanged instead of ramping up its production in line with rising demand for crude oil.
The US has the world's largest strategic reserves of approximately 714 million barrels stored in huge underground salt caverns at four sites along the coastline of the Gulf of Mexico.
According to data released by the US Energy Information Administration on Wednesday, the country’s level of crude oil reserves was nearly 617.8 million barrel, marking a increase of 2.3 million barrels last week.
According to Goldman Sachs, if the US Energy Department released oil from the SPR, it would likely be limited to only 60 million barrels, posing a $3 risk to its year-end Brent prediction of $90 per barrel.
Prices also found support as demand for crude oil has increased after the producers switched fuel from high-priced natural gas to oil.
By Sibel Morrow