Oil markets rallied Friday on the belief a tight supply situation is developing in the North Sea, where many rigs are undergoing maintenance.
Britain's widely traded North Sea Brent crude for May delivery finished up on London's International Petroleum Exchange at $20.02 a barrel, up 47 cents on the day and $1.41 on the week.Following Brent's lead, the American benchmark West Texas Intermediate crude for May jumped 59 cents on the day to $21.48 a barrel, a gain of $1.52 on the week.
As a result of late buying by small local traders, WTI ended the day on the New York Mercantile Exchange smack up against the $21.50 resistance level traders see as a key indicator of future crude buying.
They see this level as the main barrier to crude going to $23 a barrel.
Chris Bray of PaineWebber Inc. in Andover, Mass., said there was strong local buying going into the weekend.
"Everyone is talking about North Sea maintenance," the trader said.
Peter Gignoux of Shearson Lehman's London office said "major sections" of Britain's Brent fields are down for maintenance this month.
Because of maintenance deferrals last year during the Persian Gulf crisis and the need to add safety features to the offshore rigs, "this is a big one," the analyst said.
Monday's announcement of new Brent export cargoes is expected to be half the normal number, the analysts said.
The Brent problem comes on top of a tight U.S. gasoline supply situation that surfaced earlier this week, when the American Petroleum Institute reported U.S. gasoline stocks plunged 5 million barrels last week to 206.5 million.
U.S. refineries have been in prolonged maintenance, also deferred by the needs of the Persian Gulf confrontation.