LONDON, Oct. 11 (Reuters) – Oil prices rose more than $ 2 on Monday, prolonging gains as an energy crisis hits major economies amid rebounding economic activity and supply restrictions of the main producers.
Brent crude rose $ 2.17, or 2.6%, to $ 84.56 a barrel at 1136 GMT, its highest level since October 2018.
U.S. West Texas Intermediate (WTI) crude rose $ 2.67, or 3.4%, to $ 82.02, its highest level since late 2014.
“Oil prices are expected to continue to rise in the near term,” Commerzbank analyst Carsten Fritsch said.
Prices rose as more vaccinated populations emerged from coronavirus lockdowns, supporting a rebound in economic activity, with Brent advancing for five weeks and U.S. crude for seven.
The pace of economic recovery combined with cold weather has increased demand for energy, while pressure on governments to accelerate the transition to cleaner energy has slowed investment in oil projects to boost supplies.
World leaders are due to meet in November at the United Nations Climate Change Conference (COP26) in Glasgow to flesh out their energy transition commitments.
Coal, gas and electricity prices have also reached record highs in recent weeks, pushed up by widespread energy shortages in Asia, Europe and the United States.
In India, some states are experiencing power outages due to coal shortages. The Chinese government, meanwhile, has ordered miners to increase coal production as electricity prices rise. Read more
“News from last week that the (US) Department of Energy is not planning to dip into strategic reserves at this time is keeping the oil market tight and supporting prices,” the UBS analyst said. Giovanni Staunovo.
U.S. Energy Secretary Jennifer Granholm said last week that the administration was considering tapping the country’s emergency oil reserves to cool gasoline prices, although the Energy Department later said he had “no intention of taking any action at this time.” Read more
Drillers in the United States added five new oil wells last week for the fifth consecutive weekly increase in oil and gas rigs.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC +, decided last week to maintain a steady and gradual increase in production. Read more
“Stock depletion, OPEC discipline and the ongoing energy crisis will provide strong price support over the next three months,” said Tamas Varga, oil analyst at London-based brokerage firm PVM Oil Associates.
Reporting by Bozorgmehr Sharafedin in London Additional reporting by Aaron Sheldrick Editing by Louise Heavens and David Goodman
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