LONDON (Reuters) - Oil prices have jumped 2% after three days of losses, driven higher as a storm formed in the Gulf of Mexico, but were on track for a weekly fall as investors braced for the return of Iranian crude supplies after officials said Iran and world powers made progress a nuclear deal.
Brent crude futures settled up $1.33, or 2%, to $66.44 a barrel, while U.S. West Texas Intermediate was at $63.54 a barrel, up $1.64, or 2.65%.
A weather system forming over the western Gulf of Mexico has a 40% chance of becoming a cyclone in the next 48 hours, the U.S. National Hurricane Center (NHC) said on Friday.
“This early storm prompted traders to buy crude ahead of the weekend in anticipation of potential production shut-ins,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
The gains were limited by the expectation that Iran could add a million or more barrels per day of oil production later this summer.
U.S. energy firms added oil and natural gas rigs for a fourth week in a row as higher oil prices prompt some drillers to return to the wellpad.
The oil and gas rig count, an early indicator of future output, rose two to 455 in the week to May 21, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report.