Oil prices surge; U.S. crude touches high above $80 a barrel

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NEW YORK (Businesshala) – Oil prices rose more than 4% on Friday, as the global energy crisis propelled prices to their highest level since 2014 and prompted China to demand an increase in coal production. has prompted.

FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma, March 24, 2016. Businesshala / Nick Oxford / FILE PHOTO

With global energy demand rising, OPEC and allied producers have said they remain on track to gradually roll back production cuts, and while the US government said it was monitoring energy markets, it has kept prices low. Not announced immediate plans to reduce.

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US benchmark West Texas Intermediate crude briefly touched a high of $80 a barrel.

Phil Flynn, senior analyst at Price Futures Group in Chicago, said: “Oil prices are rising as the US Department of Energy backs out on plans to curb prices by releasing SPR crude and banning US crude exports. Huh.” With bullish bets on oil futures, “there isn’t much risk to stay long”, he said.

The recovery in the energy market has been tightened by demand for the fuel as economic activity resumes due to the pandemic, and many fear the cold weather could further strain natural gas supplies. China ordered miners in Inner Mongolia to ramp up coal production to ease their energy shortage.

“As the prices of natural gas and other energies such as coal continue to rise, the upside risk in the oil market is beginning to build up,” said Christopher Kuplant of Bank of America.

Brent crude futures were up 62 cents, or 0.6%, at $82.56 a barrel by 12:20 p.m. (1620 GMT), while US West Texas Intermediate (WTI) crude futures were up $1.02, or $1.02, after touching a session high of $80.11. It rose 1.3% to $79.31. per barrel, earlier this week surpassed a nearly seven-year high of $79.78.

Earlier in the week, Brent had hit a three-year high of $83.47.

Prices have been pushed up by rising European gas prices, which has encouraged a switch to oil for electricity generation, and only sticks to a plan to add by the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led allies. The decision to stay supplies 400,000 barrels per day (bpd) in November.

Benchmark European gas prices at the Dutch TTF hub stood at about $200 a barrel of crude on Friday, based on the relative value of the same amount of energy from each source, according to Businesshala calculations based on Eikon data.

“Gas-to-oil switching could accelerate demand for crude oil, which is used to generate electricity in the northern hemisphere’s winter,” ANZ Commodity Analyst said in a note.

ANZ raised its 2021 fourth quarter crude oil demand forecast by 450,000 bpd.

The US Department of Energy (DOE) said all “tools are always on the table” to deal with tight energy supply conditions, which could include the release of oil stocks.

Reporting by Jessica Resnik-Alt and Dmitry Zhdannikov Additional reporting by Roslan Khasavaneh in Singapore and Sonali Paul in Melbourne Editing by David Goodman and David Gregorio

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