Oil stays near $85 a barrel, Brent set for seventh weekly gain

Oil prices stayed near multi-year highs on Friday, erasing some earlier losses in Asian trading hours, with concerns about tight supply and stockpiles fuelling bullish sentiment.

Brent crude futures rose 23 cents, or 0.3%, to $84.84 a barrel at 0933 GMT, after Thursday`s three-year high of $86.10. The benchmark is set for its seventh weekly gain.

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U.S. West Texas Intermediate (WTI) crude futures gained 20 cents, or 0.2%, to reach $82.70 a barrel, not far off a seven-year high hit this week.

Prices have been boosted by worries about coal and gas shortages in China, India and Europe, spurring some power generators to switch from gas to fuel oil and diesel.

Winter weather in much of the United States is expected to be warmer than average, according to a National Oceanic and Atmospheric Administration forecast.

"Crude oil`s sharp rise may make it vulnerable to profit taking, however, a substantial correction may not happen unless global energy crisis subsides," said Ravindra Rao, vice president for commodities at Kotak Securities.

"Global gas and coal prices have eased but concerns persist with tighter market and higher demand winter season around the corner."

U.S. crude found support this week as investors eyed low crude stocks at the U.S. storage hub in Cushing, Oklahoma.

U.S. Energy Information Administration data on Wednesday showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018.

"America’s gasoline demand appears to be experiencing an Indian summer," PVM analysts said in a note, pointing to the highest implied demand for this time of year since 2007 despite high pump prices.