Oil prices edged higher on Friday, heading for their largest weekly gain since July after U.S. President Trump’s comments about possible military action in Syria and reports of dwindling global oil stocks.
Brent crude rose by 44 cents to $ 72.46 a barrel at 0821 GMT, up about 8 percent on the week.
NYMEX crude for May delivery gained 45 cents to $ 67.52, putting the contract on track for a weekly jump of nearly 9 percent.
Both benchmarks hit their highest since late 2014 on Wednesday after Trump warned that missiles “will be coming” in response to a suspected gas attack in Syria and after Saudi Arabia said it intercepted missiles over Riyadh.
Trump tweeted on Thursday that an attack on Syria “could be very soon or not so soon at all”, raising the prospect that an attack might not be as imminent as he seemed to suggest the previous day.
“This has been a very strong week for crude oil futures, with a lot of geopolitical concerns helping to drive the rally. As we start the last day of the week, we feel that the geopolitical risks are not as high as feared three days ago,” Petromatrix said in a note.
“The Syrian escalation risk cannot be fully written off, but we view that it deserves less of a premium than three days ago.”
A global oil stocks surplus is close to evaporating, OPEC said on Thursday, adding that its collective output fell to 31.96 million barrels per day (bpd) in March, down 201,000 bpd from February.
Vienna-based OPEC and its oil producer allies are poised to extend their supply reduction pact into 2019 even as the global glut of crude looks set to be eradicated by September, OPEC Secretary-General Mohammad Barkindo told Reuters.
The International Energy Agency (IEA), which coordinates the energy policies of industrialised nations, signalled on Friday that markets could become too tight if supply remains restrained.
“It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” the IEA said.
Meanwhile China’s March crude oil imports climbed month on month to the second-highest level on record, calculated on a daily basis.