Oil prices rose on Friday with the containment of the Delta COVID-19 variant in China and on possible disruptions to production in the Gulf of Mexico due to an approaching hurricane.
International benchmark Brent crude was trading at $71.22 per barrel at 0758 GMT for a 1.48% increase after closing Thursday at $70.18 a barrel.
American benchmark West Texas Intermediate (WTI) was at $68.58 per barrel at the same time for a 1.72% increase after it ended the previous session at $67.42 a barrel.
Having recorded a nearly 9% decline last week, oil prices showed the strongest rise since February with almost a 9% surge this week.
The price upturns came after reports that the COVID-19 Delta variant outbreak is now mostly under control in the world’s second-largest, oil-consuming country, China. Industrial data from the country has been in decline for two months, casting doubt over the global economic recovery and an oil demand revival.
Tropical Storm Ida, which is expected to strengthen into a hurricane, started heading towards the Gulf of Mexico, the region that contains more than half of the country’s petroleum refining capacity.
Some oil companies including bp, Shell, Chevron and BHP have already begun fully or partially evacuating their offshore platforms.
A possible halt in production on offshore platforms and oil rigs in the area is pushing prices higher when oil demand is still under demand pressure.
Investors are now focused on US Fed chief Jerome Powell’s speech on monetary plans scheduled for Friday at the annual Jackson Hole symposium in Wyoming. This event is expected to impact the US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.
The decline or increase in the value of the greenback will directly impact dollar-indexed oil prices.
By Sibel Morrow