# Oil rallies to $73 on tight U.S. supplies, Biden-Xi call
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-10
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Oil Rises Above $73 as Hurricane Ida Disrupts US Supply
Meta Description: Oil prices briefly hit $73 as Hurricane Ida halts US supply, boosting risk assets. Market focuses on global supply tightness, supported by US-China trade hopes.
URL: https://financedigest.com/oil-rallies-to-73-on-tight-u-s-supplies-biden-xi-callhtml

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By Jessica Resnick-Ault

NEW YORK (Reuters) -Oil rose to briefly top $73 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost.

About three quarters of the U.S. Gulf’s offshore [oil production](https://www.financedigest.com/best-paying-jobs-in-oil-and-gas-production.html "Best Paying Jobs in Oil And Gas Production"), or about 1.4 million barrels per day, has remained halted since late August. That is roughly equal to what OPEC member Nigeria produces.

The [market is back](https://www.financedigest.com/analysis-bond-traders-get-their-swagger-back-in-rate-obsessed-markets.html "Analysis-Bond traders get their swagger back in rate-obsessed markets") to focusing on the tighter supply situation globally, and that is giving it a boost,” said Phil Flynn, senior analyst at Price Futures group in Chicago. While [China is releasing oil](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") from its strategic petroleum reserve, the amount is more than offset by reduced production in the Gulf of Mexico, Flynn added.

Brent crude rose $1.36, or 1.9%, to $72.81 by 1:02 p.m. ET (1702 GMT). The session high was $73.15 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.43, or 2.1%, to $69.56.

Brent was on track for a small [weekly gain](https://www.financedigest.com/londons-ftse-100-edges-higher-set-for-fourth-weekly-gain.html "London’s FTSE 100 edges higher, set for fourth weekly gain") and has rallied 41% this year on supply cuts by the Organization of the Petroleum Exporting Countries and some demand recovery from the pandemic.

Oil and equity markets also got a [boost from news of a call](https://www.financedigest.com/uk-businesses-call-for-looser-immigration-rules-to-boost-growth.html "UK businesses call for looser immigration rules to boost growth") between U.S. [President Joe Biden](https://www.financedigest.com/biden-arrives-in-south-korea-for-talks-with-president-yoon.html "Biden arrives in South Korea for talks with President Yoon") and his Chinese counterpart Xi Jinping. The call raised [hopes for warmer relations and more global](https://www.financedigest.com/global-stocks-close-in-on-4-week-highs-oil-rises-on-hopes-of-soft-landing.html "Global stocks close in on 4-week highs, oil rises on hopes of ‘soft landing’") trade, analysts said. \[MKTS/GLOB\]

The Biden-Xi phone call has had the same effect on [oil markets as it has on other asset](https://www.financedigest.com/exclusive-repsol-agrees-to-sell-alberta-oil-assets-to-cppib-backed-teine-energy-sources.html "Exclusive-Repsol agrees to sell Alberta oil assets to CPPIB backed-Teine Energy -sources") classes,” said Jeffrey Halley, analyst at brokerage OANDA.

The United States added rigs in the latest week, [energy service provider Baker](https://www.financedigest.com/french-energy-suppliers-will-let-struggling-bakers-renegotiate-contracts-le-maire.html "French energy suppliers will let struggling bakers renegotiate contracts – Le Maire") Hughes said, indicating production may rise in coming weeks.

On Thursday, both crude contracts fell more than 1% after [China said it would release crude oil](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") reserves https://www.reuters.com/business/energy/china-release-state-crude-oil-reserves-first-time-2021-09-09 via public auction to help ease high feedstock costs for refiners.

In focus next week will be revisions to the [oil demand outlook for 2022 from OPEC](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook") and the International Energy Agency. OPEC will likely revise down its forecast on Monday, two OPEC+ sources said.

(Additional reporting by Florence Tan in Singapore and Sonali Paul in Melbourne; Editing by Elaine Hardcastle, Edmund Blair and David Gregorio)


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