By Barani Krishnan

Investing.com – Winter may be months away, but markets being markets have the habit of forerunning things. That sentiment was evident Friday when crude oil closed higher for the fifth consecutive week after reaching three-year highs.

“When winter comes rolling in, there’s going to be a huge competition for pipeline space,” said Phil Flynn, analyst at Chicago’s Price Futures Group.

The combination of a slow comeback in U.S. oil production after last month’s Hurricane Ida, along with a shortage of butane to add to winter blends of gasoline “is creating a situation that is very bullish for petroleum and markets,” Flynn added.

New York’s benchmark oil price, WTI, was up 0.9% at $73.98 per barrel. For the week, WTI rose 2.8%.

London-traded crude, the global benchmark for oil, settled up 84 cents, or 1.1%, at $78.09. Brent gained 3.7% during the week.Brent gained 3.7%, and WTI was up for the fifth consecutive week. Brent is now at its fourth-highest level in five weeks. Both Brent and WTI are about half off their year highs.

WTI reached $74.27 at the peak earlier in session. It was its highest point since October 2018. Brent reached $78.24 and set a similar milestone.

While oil prices were trending higher from the beginning of this year, Brent reached $78.24 in August. This was due to concern over new Covid infections caused by the Delta variant.

However, Hurricane Ida severely impacted U.S. Gulf Coast production. Since then, supplies have been slowly coming back. About a month ago, the Gulf’s storm brought down 294,414 barrels worth of oil capacity. That accounts for nearly 16% of the total production.

Louise Dickson from Rystad energy, senior oil markets analyst, stated, “The market pricing in the prolonged impact supply disruptions and the probable storage draws that will need to satisfy refinery demand.”