Oil prices are picking up in a tight market; US crude at its highest for 7 years, Energy News, ET EnergyWorld

TOKYO: Oil prices rose on Monday, extending pre-weekend gains, with U.S. crude hitting a seven-year high as global supply remained tight amid strong global demand as US crude economies are recovering from collapses induced by the coronavirus pandemic.

Brent crude futures soared 26 cents, or 0.3%, to $ 85.79 a barrel at 0048 GMT, after last Friday’s gain of 1.1%. The contract was near a three-year high of $ 86.10, reached last Thursday.

US West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.6%, to $ 84.24 a barrel, after climbing 1.5% on Friday. It hit its highest since October 2014 – $ 84.28 – earlier in the session.

“Bullish sentiment continues to support oil prices as global supply remains tight as demand recovers from the pandemic,” said Toshitaka Tazawa, analyst at Fujitomi Securities Co Ltd.

“But the immediate gains for the contract closest to WTI may be limited given the growing setback,” Tazawa said.

WTI futures contracts are currently heavily discounted, which means future date contracts are priced lower than the current contract. Normally, the following months are traded at a higher price, reflecting the costs of storing the oil.

Oil prices have also been supported by concerns over coal and gas shortages in China, India and Europe, which have prompted a switch to diesel and fuel oil for electricity.

Reflecting the strong market sentiment, fund managers increased their net long positions in US crude futures and options in the week to October 19, the US Futures Commission said on Friday. goods (CFTC).

Over the weekend, the Crown Prince of Saudi Arabia said the world’s largest oil exporter aims to achieve ‘net zero’ greenhouse gas emissions, mostly produced by burning fossil fuels, from here 2060 – 10 years later than the United States.

Meanwhile, US energy companies shut down oil and gas platforms for the first time in seven weeks last week even as oil prices rose, energy services firm Baker Hughes Co said in its report on Friday. closely followed.


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Felix J. Dixon

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