Oil rallies to $73 on Biden-Xi conversation, tight US supplies

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Oil rallies to $73 on Biden-Xi conversation, tight US supplies

On Friday, US West Texas Intermediate (WTI) alongside Brent crude futures’ prices had climbed more than 2 per cent with both benchmarks eking out moderate weekly gains, while Brent briefly rallied to $73 a barrel as US-China trade hopes ramped up following a telephone conversation between the US President Joe Bide and his Chinese counterpart Xi Jinping.

Aside from that, simmering signals of a squeezed supply in the US Gulf of Mexico for an unforeseeable period of time, had feathered up the crude oil contracts’ prices further. As of Friday, more than a three-quarter or roughly a 77 per cent of entire US Gulf’s offshore oil outputs remained shut-in, slashing out as many as 1.4 million bpd (barrels per day) or more than 1.4 per cent of overall oil outputs around the globe, supporting crude oil futures’ prices despite rising delta variant cases threatening global economic recovery.

Besides, US-based oil rig services provider Baker Hughes said earlier in the day that the United States had added 7 oil rigs in the latest week, however, the gains in rig counts had barely alleviate concerns of an elusive return of normalcy in the US Gulf of Mexico operation in a near term.

Oil rallies, posts weekly percentage gains

Citing statistics, in the day’s commodity market wind-down, UK crude futures sky-rocketed 2.3per cent to $72.92 a barrel, while US WTI crude oil futures’ prices soared 2.3 per cent to $69.72 a barrel.

Meanwhile, adding that Beijing had decided to open up the tap of its strategic petroleum reserve amid a steep supply-crunch in the market, a senior analyst at Price Futures group in Chicago, Phil Flynn said, "The market is back to focusing on the tighter supply situation globally, and that is giving it a boost in US crude oil futures’ prices”.