Oil was up Friday morning in Asia, rising for a fourth day with the focus on tighter supplies and a strong appetite for riskier assets like crude oil alongside high hopes for the economic recovery from COVID-19.
Brent oil futures edged up 0.16% to $77.37 by 12:34 AM ET (4:34 AM GMT) after hitting a two-month high on Thursday and closing at its highest level since October 2018. WTI futures inched up 0.04% to $73.33 after closed 1.5% higher during the previous session, the highest since the start of August 2020.
“Crude prices appear to be on a one-way street that is headed higher… with risk appetite running wild,” OANDA senior market analyst Edward Moya told Reuters.
Meanwhile, U.S. Energy Information Administration (EIA) data said that capacity utilization rates at U.S. East Coast refineries increased to 93%, the highest since May 2019.
U.S. crude oil supply data released on Wednesday showed that inventories fell to the lowest in almost three years, with the damage from hurricanes Ida and Nicholas keeping draws elevated.
The black liquid saw brief losses earlier as China concluded its first public sale of state reserves. State-owned PetroChina and private refiner and chemical producer Hengli Petrochemical bought four cargoes totaling about 4.43 million barrels, according to sources with direct knowledge of the auction.
However, the auction will have little impact on the market due to the size of the sale relative to China’s consumption and imports, WoodMac analysts said ahead of its start.
Some members of the Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) have also struggled to raise output due to under-investment or delays to maintenance work due to COVID-19.
Still, U.S. oil refiners looking to replace the U.S. Gulf crude lost to the two hurricanes were able to turn to Iraqi and Canadian oil, while Asian buyers have been switching to Middle Eastern and Russian supplies, according to analysts and traders.