Oil prices increased on Monday from oil supply disruptions in the US Gulf of Mexico where almost half of the production is still offline following Hurricane Ida.
International benchmark Brent crude was trading at $73.45 per barrel at 0732 GMT for a 0.72% increase after closing Friday at $72.92 a barrel.
American benchmark West Texas Intermediate (WTI) was at $70.27 per barrel at the same time for a 0.78% increase after it ended the previous session at $69.72 a barrel.
According to the US Bureau of Safety and Environmental Enforcement, 48% of current oil production and 54% of natural gas production in the Gulf of Mexico has been shut in after Hurricane Ida hit the area two weeks ago.
With the potential demand rebound in the area after the hurricane, the refineries managed to quickly restart oil production compared to previous storms. Most of the nine Louisiana refineries affected by the storm had resumed production on Friday.
Royal Dutch Shell, the largest oil producer in the US Gulf of Mexico region, canceled some oil exports due to the hurricane's damage to offshore platforms. Experts predict that it may take weeks for production in the region to return to normal.
However, the number of oil rigs in the country increased last week, according to the weekly data released by oilfield services company Baker Hughes.
The number of oil rigs, an indicator of short-term production in the country, increased by 7 to 401 for the week ending Sept. 10 from 394 the previous week.
- Supply risks limit price hikes
Investor supply concerns continue to limit upward price movements after China last week announced that it would release crude oil reserves to the market via public auction.
The administration for China's state reserves said the move aims to ease the pressure of high feedstock costs on domestic refiners.
Earlier on Monday, China said details of planned crude oil sales would be announced in due course.
According to the latest data from China's National Bureau of Statistics, there are nine storage bases in the country with a total crude oil reserve capacity of 237.66 million barrels. Experts estimate that a maximum of 10-15 million barrels of crude oil will be sold in one lot via auction.
Investors are now keeping tabs on oil market reports to be released this week by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). Experts predict that OPEC will revise down its oil demand forecast for 2022.
By Sibel Morrow