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Brent crude futures gained 67 cents, or 0.8%, to $80.20 a barrel
at 1016 GMT, after reaching their highest level since October
2018 at $80.75. Brent gained 1.8% on Monday.
U.S. West Texas Intermediate (WTI) crude futures rose 79 cents,
or 1%, to $76.24 a barrel, after hitting a session high of
$76.67, its highest since early July. It jumped 2% the previous
day.
Hurricanes Ida and Nicholas, which swept through the U.S. Gulf
of Mexico in August and September, damaged platforms, pipelines
and processing hubs, shutting most offshore production for
weeks.
Also weighing on supply, top African oil exporters Nigeria and
Angola will struggle to boost output to their quotas set by the
Organization of the Petroleum Exporting Countries (OPEC) until
at least next year due to underinvestment and maintenance
problems, sources at their respective oil firms warn.
Their battle mirrors that of several other members of the OPEC+
group of producers which have been curbing production to support
prices but are now failing to ramp up output to meet recovering
demand.
"Oil markets are accelerating, as a persistent supply deficit is
shrinking the inventory cover to the lowest level in decades,"
Barclays said in a note.
The bank raised its 2022 Brent and WTI price forecasts to £77
and $74 a barrel, respectively.
Morgan Stanley sees Brent trading at $77.5 a barrel in the third
quarter under a base case and at $85 in a bull case.
Prices are facing headwinds, however, from a power crunch in the
world's biggest energy consumer.
"Recent power rationing to industries in China to drive down
emissions could weigh on economic activity, potentially
offsetting the tailwind from incremental diesel use in power
generation," Barclays said.
(Additional reporting by Yuka Obayashi in Tokyo; editing by
Jason Neely)
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