Oil prices rose by around 2% Monday. This is a result of an energy crisis that grips major economies. It was accompanied by a pickup in economic activity, and restrained supplies from major oil producers.
Brent crude oil rose 1.8% to $83.84 per barrel or $1.45 by 1336 GMT. This was its highest level since October 2018.
U.S. West Texas Intermediate crude oil (WTI), rose $1.71 or 2.2% to $81.06. This is its highest level since late 2014.
Carsten Fritsch, Commerzbank analyst, said that oil prices will likely continue to rise in the short-term.
Prices have risen as more coronavirus-vaccinated people are released from lockdowns. This has supported a revival of economic activity with Brent moving up for five weeks and U.S. oil for seven.
Cold weather and the pace of economic recovery have increased energy demand. Government pressure to speed up the transition to cleaner energy has slowed investments in oil projects to increase supplies.
The United Nations Climate Change Conference (COP26), which will be held in Glasgow in November, is expected to bring together world leaders to discuss energy transition and to make commitments.
In recent weeks, prices for electricity, coal, and gas have reached record highs due to widespread energy shortages in Asia, Europe, and the United States.
Five new oil wells were added by American drillers last week, marking the fifth consecutive weekly increase in oil-and-gas rigs.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+ decided to continue a steady and gradual rise in production
“Depleting stocks and OPEC discipline will provide solid price support over the next three months,” stated Tamas Varga (oil analyst at London brokerage PVM oil Associates).
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