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Oil prices rise on global supply concerns

Oil prices

Brent crude was up 12 cents at $77.37 a barrel after hitting two-month high on Thursday

Oil prices rose on Friday for a fourth day in a row due to global supply concerns following powerful storms in the US, with China’s first public sale of state crude reserves causing a momentary glitch in the rise.

Brent crude was up 12 cents, or 0.2%, at $77.37 a barrel, by 0321 GMT, after hitting two-month high on Thursday and ending at its highest level since October 2018.

U.S. oil was up 6 cents, or 0.1%, at $73.36 a barrel, having ended 1.5% in the previous session, the highest level since the start of August.

Oil companies in the US have struggled to fully restore deliveries to the eastern seaboard after storms damaged facilities on the Gulf coast.

A prolonged recovery from Hurricane Ida disruptions and robust demand are eating into oil stockpiles, ANZ Research analysts said in a note. U.S. oil inventory withdrawals are accelerating.

In a sign of strengthening fuel demand, capacity utilization rates at U.S. East Coast refineries rose to 93%, the highest since May 2019, Energy Information Administration (EIA) data showed.

Inventories dropped to the lowest in nearly three years after damage from two hurricanes kept draws elevated in the US, EIA data earlier in the week showed.

Prices declined briefly on Friday after China’s first public sale of state reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totalling nearly 4.43 million barrels, according to sources with direct knowledge of the auction.

WoodMac analysts said just before the auction that it would have little impact on the market due to the size of the sale relative to China’s consumption and imports.

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 pandemic that began last year.

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