Oil prices rose on Friday amid growing signs of tightness in US markets after Hurricane Ida hit offshore oil production, although benchmarks had expected a weekly decline of almost 1% after China announced plans to sell oil from its strategic reserves.
November Brent crude futures rose 63 cents, or 0.9%, to $72.08 a barrel by 06:24 GMT. US WTI crude futures for October traded at $68.65 a barrel, up 51 cents, or 0.8%.
Brent is heading for a second consecutive weekly drop.
Both contracts fell more than 1 per cent on Thursday to their lowest level since 26 August after China said it would release crude stocks into the market through public auctions to relieve pressure from high crude prices on domestic refiners, a move that was described as a first.
exness forex broker analysts believe the announcement was probably made to confirm the July and August inventory sales.
"While the sale likely put pressure on China's crude imports this summer, along with depleted kettle import quotas, we expect a further limited reduction in China's onshore crude stocks this year and a resumption of higher import volumes later in the year as demand increases seasonally and following the recent COVID-19 outbreak," Goldman Sachs said in an analyst note.
Energy Aspect analyst Liu Yuntao said the inventory release came as Chinese major companies were forced to replace stocks they bought in September and October from Shell in the US Gulf of Mexico.
Royal Dutch Shell Plc, the largest oil producer in the US Gulf of Mexico, cancelled some export cargoes because of Ida's damage to offshore facilities.
Nearly 1.4 million barrels per day of offshore oil production remain shut down in the Gulf of Mexico and 1 million barrels per day of refining capacity is also offline.
To mitigate the impact, the US Department of Energy said on Thursday it had approved a second loan of 1.5 million barrels of oil to Exxon Mobil Corp from the Strategic Petroleum Reserve (SPR).
On the demand side, some US airlines, which have played a key role in the recovery of jet fuel markets, have warned of slowing ticket sales.
American Airlines, United Airlines Holdings Inc, Delta Air, Southwest Airlines Co and JetBlue Airways said ticket sales had slowed and cut revenue forecasts as rising COVID-19 cases threatened to stall the recovery in travel.
