Investing.com - Oil prices were on track for a sharp weekly gain as concerns over Tropical Storm Barry hitting supply outweighed worries of a global supply glut in the making.
New York-traded West Texas Intermediate crude futures gained 7 cents, or 0.1%, to $60.27 a barrel by 7:57 AM ET (11:57 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., traded up 22 cents, or 0.3%, to $66.74.
WTI oil and Brent have risen 4.8% and 3.9%, respectively, this week as Tropical Storm Barry has threatened production in the Gulf of Mexico where output has already been cut by over 1 million barrels a day - more than half the region's usual output.
The storm, which could hit the Louisiana coast on Saturday, was forecast to become a category one hurricane with winds of at least 74 miles per hour.
Among other bullish news this week, Iran’s attempt to seize a British tanker in the Persian Gulf, and a drop in U.S. crude inventories to the lowest level in almost three months have helped support prices.
The above short-term factors have outweighed longer-term bearish concerns of weakening demand and recent forecasts for a global supply glut despite OPEC-led efforts to curb output.
Surging U.S. oil output will outpace sluggish global demand, leading to a supply glut the next nine months, the International Energy Agency (IEA) said on Friday.
In its monthly report, the IEA predicted that the demand for OPEC crude oil in early 2020 could fall to only 28 million barrels per day (bpd), with non-OPEC expansion in 2020 rising by 2.1 million bpd - a full 2 million bpd of which is expected to come from the U.S.
The IEA report came on the back of a similar outlook from OPEC released on Thursday. The cartel raised its forecast for non-OPEC supply growth to accelerate from 2.05 million bpd to 2.44 million bpd in 2020.
That increases the pressure on OPEC and its partners in an ongoing agreement on output restraint to show discipline. However, figures released by Iraq earlier Friday showed that it was still producing above its agreed output ceiling in June, at 4.6 million barrels a day.
In other energy trading, gasoline futures lost 0.3% to $1.9845 a gallon by 8:01 AM ET (12:01 GMT), while heating oil dropped 0.1% to $1.9760 a gallon.
Lastly, natural gas futures traded up 0.5% to $2.429 per million British thermal unit.
-- Reuters contributed to this report.
Gulf of Mexico operators have shut-in 1.01 million barrels a day of oil production because of the storm, the Bureau of Safety and Environmental Enforcement said in a notice.