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Oil Futures Settle Sharply Higher

Crude oil futures settled sharply higher on Friday amid signs of a drop in crude supply in the U.S. due to the impact of Hurricane Ida.

The latest data from Energy Information Administration showing declines in crude oil, gasoline and distillate stockpiles in the U.S. last week continued to support oil's advance.

Oil's rise was also due to reports indicating a warmer relationship between the U.S. and China following a call between the presidents of the two nations.

West Texas Intermediate Crude oil futures for October ended up by $1.58 or about 2.3% at $69.72 a barrel. WTI crude futures gained about 0.6% for the week.

Brent crude futures gained nearly $1.50 or more than 2% to about $72.95 a barrel.

According to reports, nearly 75% of offshore oil production in the Gulf of Mexico region remains halted for nearly three weeks now.

Data from Energy Information Administration (EIA) on Thursday showed crude stockpiles in the U.S. declined 1.529 million barrels in the week ended September 3, much less than an expected draw of 4.6 million barrels.

Gasoline inventories dropped by 7.2 million barrels, more than twice the expected drop, while distillate stockpiles were down by 3.142 million barrels in the week, the EIA data showed.

According to a report released by Baker Hughes Friday afternoon, the number of active U.S. rigs drilling for oil climbed by seven to 401 this week. Last week, the number of rigs had dropped by 16, the biggest weekly decline this year, due largely to evacuations in the Gulf of Mexico due to Hurricane Ida.

The total active U.S. rig count, which includes those drilling for natural gas, climbed by six to 503, the report said.

Traders now look ahead to an update on the outlook for the oil market from the Organization of the Petroleum Exporting Countries (OPEC) on Monday.

The International Energy Agency (IEA) is scheduled to release its outlook on Tuesday.

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