Meanwhile, Vitol chief says demand will fully recover by mid-next year: File Image/Pixabay
Concern over China's Evergrande debacle was overshadowed on Friday by the impact of global output disruptions and recent inventory draws, and as a result crude prices rose to a near three-year high.
Brent climbed 88 cents to $78.13 per barrel by 1715 GMT (on track for the highest close since October 2018), while West Texas Intermediate rose 84 cents to $74.14.
Friday's session also put Brent on track for the third consecutive week of gains and the fifth for WTI as disruptions due to the damage caused by Hurricane Ida continued to plague Gulf of Mexico producers (with some refiners turning to oil from Iraq and Canada).
Louise Dickson, senior oil markets analyst, Rystad Energy
The market is pricing in a prolonged impact of supply disruptions
For the record, the Bureau of Safety and Environmental Enforcement said that 31 platforms remain shut with a loss of 294,414 barrels of oil; overall the storm has caused the total loss of 30.1 million barrels.
Another source of supply concern is the Organization of the Petroleum Exporting Countries (OPEC), some of whose members are reportedly struggling to raise output due to under-investment or maintenance delays.
Louise Dickson, senior oil markets analyst at Rystad Energy, said, "The market is pricing in a prolonged impact of supply disruptions, and the likely storage draws that will be needed to fulfill refinery demand."
As for the recent stock draws in the U.S., UBS analysts noted that they may contribute to Brent possibly hitting $80 per barrel by the end of this month.
That prediction was shared by Vitol, whose CEO Russell Hardy said higher gas prices are boosting demand: "Can demand surprise us to the upside because of power switching? Yes, and is it likely that there's half a million barrels a day of extra demand that comes through because of gas pricing? Probably our view is, that is likely across winter."
He explained that European gas stockpiles will be at about 78 percent of normal levels during October, an indication of a tightening market in the colder months.
Hardy went on to note that a global return to full demand as the pandemic winds down will likely occur in the middle of next year, roughly the same time world scientists say Covid will be reduced to the severity of a common cold.