Oil hits 6-week high on US supply concerns

Oil prices continued to rally as the US market opened on Monday, and hit a 6-week high, amid concerns over the return of the US supply to its pre-Hurricane Ida levels.

US crude rose 1.7% to the highest since last August 4 at $70.75 a barrel, after opening at $69.58, and hit a low at $69.54, and Brent crude rose 1.3% to the highest since August 2 at $73.88 a barrel, after opening at $72.93, and hit a low at $72.70.

The US crude gained 2.5% on Friday, and Brent crude rose 2.3%, in the second gain in 3 days, due to concerns about US supplies.

Oil prices gained around 0.5% last week, the third weekly gain in a row, as fuel demand levels improved in the US, China and India.

Nearly 75% of production in the Gulf of Mexico or about 1.4 million barrels per day remained idle, as producers in the region are still struggling to resume activity.

Gulf of Mexico encompasses 17% of the US total production, which was 11.5 million bpd before Hurricane Ida, and is currently around 10 million barrels per day.

Royal Dutch Shell canceled some export shipments in the Gulf of Mexico on Thursday due to damages to offshore facilities from Hurricane Ida.