Oil prices reach multi-year highs on tight supply
Reuters
Published Oct 24, 2021 21:22
Updated Oct 25, 2021 15:27
By Stephanie Kelly
NEW YORK (Reuters) - Oil prices reached multi-year highs on Monday before steadying, as tight global supply and strengthening fuel demand in the United States and beyond supported prices.
Brent crude futures gained 46 cents to settle at $85.99 a barrel. The contract reached a session high of $86.70 a barrel, its highest level since October 2018.
U.S. West Texas Intermediate (WTI) crude futures were unchanged at $83.76 a barrel after reaching $85.41 a barrel, the highest since October 2014.
Both benchmarks have climbed by around 20% since the start of September. U.S. crude has risen for nine straight weeks, while Brent has risen for seven.
"The global energy supply crunch continues to show its teeth, as oil prices extend their upward march this week, a result of traders pricing in the ongoing rise in fuel demand – which amid limited supply response is depleting global stockpiles," said Louise Dickson, senior oil markets analyst at Rystad Energy.
Goldman Sachs (NYSE:GS) said a strong rebound in global oil demand could push Brent crude prices above its year-end forecast of $90 a barrel. The bank estimated gas-to-oil switching could contribute at least 1 million barrels per day (bpd) to oil demand.
After more than a year of depressed fuel demand, gasoline and distillate consumption is back in line with five-year averages in the United States, the world's largest fuel consumer.
Oil prices have also been bolstered by worries over coal and gas shortages in China, India and Europe, which spurred fuel switching to diesel and fuel oil for power.
"The reason we're seeing strength today is many fold, but amongst them is fuel switching," said Bob Yawger, director of energy futures at Mizuho.
In India, refiners' crude oil throughput in September edged higher from the previous month, government data showed on Friday, as refineries boosted output to meet surging demand.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.