Oil prices held steady at multi-year highs Friday. This erased some losses in Asian trading hours. Bullish sentiment was fuelled by concerns about stockpiles and tight supply.
Brent crude oil futures rose 0.3% to $84.84 per barrel at 0933 GMT. This was after Thursday’s record-breaking $86.10. The benchmark has been set for its seventh weekly gain.
U.S. West Texas Intermediate crude futures rose 20 cents or 0.2% to $82.70 per barrel. This is not far from a seven-year high.
Fears about gas and coal shortages in China, India, and Europe have pushed prices up. Some power generators switched to diesel and fuel oil to reduce their dependence on gas.
According to a National Oceanic and Atmospheric Administration forecast, winter weather in the United States will be warmer than normal.
Ravindra Rao (Vice President for Commodities at Kotak Securities) stated that crude oil’s rapid rise could make it more vulnerable to profit-taking. However, a significant correction may not occur unless the global energy crisis subsides.
Global gas and coal prices have slowed, but there are still concerns about tightening markets and a higher winter season demand.
U.S. crude gained support this week, as investors viewed low crude stocks at the U.S. storage facility in Cushing (Oklahoma).
Data from the U.S. Energy Information Administration on Wednesday showed that crude oil stocks at Cushing dropped to 31.2 Million barrels, their lowest level in October 2018.
PVM analysts wrote that America’s gasoline demand seems to be experiencing an Indian Summer. They pointed out the highest implied gasoline demand since 2007, despite high pump prices.
