NEW YORK (Businesshala) – Oil rose on Friday, surging nearly 4% in the week as the global energy crisis pushed US prices to the highest level in nearly seven years as big power users struggle to keep up with demand. .
Even as economic activity declined due to the pandemic, with demand picking up around the world, the Organization of the Petroleum Exporting Countries and Allied Producers (OPEC+) said this week that they are gradually bringing back production. will remain on the way.
Meanwhile the US government said it was monitoring energy markets, but did not announce immediate action to reduce prices, such as a release from strategic petroleum reserves, which further supported the oil market.
Brent crude futures were up 44 cents, or 0.5%, at $82.39 a barrel. Earlier in the week, the global benchmark had hit a three-year high of $83.47.
West Texas Intermediate (WTI) crude was up $1.05, or 1.3%, at $79.35. It was the highest close for the US benchmark since October 31, 2014.
US petrol futures also closed at their highest level since October 2014 on Friday.
“The fundamental backdrop is one of tight supply that will see these prices continue to rise,” said John Kilduff, partner at Again Capital in New York.
As energy markets have hardened due to improved fuel demand, many fear the harsh cold could further affect 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.
Prices have been driven up by rising European gas prices, which has encouraged the switch to oil for electricity generation.
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 barrels per day.