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Oil looks set to test 3-year high as supplies tighten
Oil prices rose for a fourth day on Friday, taking Brent towards three-year highs, as investors focused on tighter supplies amid strong appetite for riskier assets like crude and high hopes for recovery from the pandemic.
Brent crude was up 40 cents, or 0.5 per cent at $77.65 a barrel, by 0037 GMT, after touching a two-month high on Thursday and closing at its highest since October 2018.
U.S. oil was up 27 cents, or 0.4 per cent, at 73.57 a barrel, having closed 1.5 per cent in the previous session, the highest since the start of August.
“Crude prices appear to be on a one-way street that is headed higher … with risk appetite running wild,” said Edward Moya, senior market analyst at OANDA.
In a sign of strengthening fuel demand, capacity utilization rates at U.S. East Coast refineries increased to 93 per cent, the highest since May 2019, Energy Information Administration (EIA) data showed.
Inventories fell to the lowest in almost three years after damage from two hurricanes kept draws elevated in the United States, EIA data earlier in the week showed.
Some members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, have also struggled to raise output following under-investment or delays to maintenance work during the worst global health crisis in 100 years.
Still, U.S. oil refiners on the hunt for replacements for the U.S. Gulf crude lost to storms have been able to turn to Iraqi and Canadian oil, while Asian buyers have been switching to pursuing Middle Eastern and Russian grades, analysts and traders said.
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