Oil prices extended gains toward $71 a barrel on Wednesday to their highest in nearly two weeks, after a cyclone disrupted Oman oil and gas exports before weakening on its way to Iran.
London Brent crude rose by 28 cents to $70.73 a barrel after touching $70.80, the strongest level since May 25. US light crude gained 21 cents to $65.82 a barrel.
Tropical cyclone Gonu, the strongest to reach Oman's coast since 1977, disrupted production and loading, temporarily closing a terminal shipping 650,000 barrels per day (bpd) of crude.
It weakened to the equivalent of a Category One hurricane from a maximum-force Category Five on Wednesday, on its way to the Strait of Harms, a major shipping route for Gulf oil shipments, towards south-eastern Iran.
"The major impact is some delays in loading. Any damage to production facilities does not seem to be on the cards," said Andrew Harrington, a commodity analyst at ANZ Bank.
United States gasoline inventory data to be released later on Wednesday are expected to show stocks rising for the fifth consecutive week, a Reuters survey showed. The peak demand-driving season in the United States kicked off last weekend, and traders will be keen to see if gasoline inventories had built up prior to that.
"If stocks do not meet expectations, some of which have been built into the current price, then we may see prices go up," said Harrington. Disruptions to Nigerian oil production and Iran's atomic dispute with the West remain underlying issues affecting oil prices, said Gerard Burg, minerals and energy economist at National Bank Australia. Some 722,000-bpd of Nigerian production or about 26 percent of the country's capacity, remained shut in due to militant attacks and sabotage.