Oil was trading below multi-year highs on Friday, with bullish sentiment on short supply on concerns from world leaders that disruptions from the COVID-19 pandemic may not end demand.
Brent crude futures were up 92 cents, or 1.1 per cent, at $85.53 a barrel. The benchmark, which touched a three-year high of $86.10 on Thursday, was up one percent in the week, marking its seventh weekly gain.
US West Texas Intermediate (WTI) crude futures were up $1.26, or 1.5 per cent, at $83.76 a barrel, not far from a seven-year high this week. The contract rose 1.7 percent in the week to the ninth straight week.
Concerns about coal and gas shortages in China, India and Europe have driven prices up, prompting some power generators to switch from gas to fuel oil and diesel.
Winter weather is expected to be warmer than average across much of the United States, according to forecasts from the National Oceanic and Atmospheric Administration.
US crude found support this week as investors looked to lower crude stocks at the US storage hub in Cushing, Oklahoma.
Crude stocks at Cushing fell to 31.2 million barrels, the lowest level since October 2018, data from the US Energy Information Administration showed on Wednesday.
“US gasoline demand is experiencing an Indian summer,” PVM analysts said in a note, pointing to the highest implied demand for this time of year since 2007 despite higher pump prices.
“Supply is still very, very tight, with markets cautious about the potential for an uptick in COVID cases in Russia, China and now Germany,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
German Chancellor Angela Merkel said the pandemic was not over, after prices returned from their earlier highs. Federal Reserve Chairman Jerome Powell said he cannot rule out another COVID-19 spike this winter.