Brent crude futures were $1.22, or 1.7 per cent, higher at $72.29 a barrel at 1355 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed $1.36, or 2 per cent, to $68.78 a barrel.
For the week, Brent was on track for a rise of 11 per cent, its biggest weekly jump since June 2020. WTI was headed for a weekly gain of more than 10 per cent, also the strongest since June 2020.
“Energy traders are pushing crude prices higher in anticipation of disruptions in output in the Gulf of Mexico and on growing expectations OPEC+ might resist raising output given the recent Delta variant impact over crude demand,” Edward Moya, senior market analyst at OANDA, said.
Companies started airlifting workers from Gulf of Mexico oil production platforms on Thursday and BHP and BP said they had begun to stop production at offshore platforms as a storm brewing in the Caribbean Sea was forecast to barrel through the Gulf on the weekend.
Gulf of Mexico offshore wells account for 17 per cent of U.S. crude oil production and 5 per cent of dry natural gas production. Over 45 per cent of total U.S. refining capacity lies along the Gulf Coast.
The prospect of U.S. Gulf supply outages helped turn the market around from losses on Thursday, which had been partly spurred by output returning at a Mexican oil platform following a fatal fire.
“The market may have more immediate concerns, with a storm building in the Caribbean. It’s expected to become a powerful hurricane and potentially wreak havoc in the Gulf of Mexico and Texas early next week,” ANZ Research said in a note.
Prices for oil and other risky assets on Thursday were pressured by U.S. Federal Reserve officials’ comments that the central bank must get on with its stimulus tapering.