Oil prices rose in trading today, Monday, at the beginning of the week’s trading, to continue reaping gains, in conjunction with the increase in demand for crude, and the energy crisis that hits a number of major economies.
The rise in oil prices was supported by the recovery in economic activity with the recovery from the effects of the Corona virus, and the restriction of supplies from major producers.
Oil Prices Today
By 09:24 AM GMT (12:24 PM GMT), Brent crude futures prices for December delivery rose by 2.10%, recording $84.12 a barrel, after rising about 4% last week.
The price of West Texas Intermediate crude futures – November delivery – rose 2.57%, recording 81.39 dollars a barrel, the highest level since late 2014, and US crude rose 4.6% during Friday.
Rising oil prices came as more vaccinated residents emerged from coronavirus lockdowns; This supports the recovery of economic activity.
Coal and gas prices have also risen as economies recover; This made oil more attractive as a fuel for generating electricity; What pushed the crude oil markets higher.
Oil Rise Factors
“The moves are driven by momentum, as intertwining factors of higher expected inflation support the upward movement in oil prices,” said Kelvin Wong, commodities analyst at CMC in Singapore.
In India, some states are experiencing blackouts due to coal shortages, while in China, the government has ordered miners to increase coal production as energy prices rise.
The energy crisis sweeping the world raises the prospect of a difficult northern winter with rising heating demand.
The Commodity Futures Trading Commission said on Friday that fund managers increased their net long positions in US crude futures and options in the week ending October 5.
The commission said the group of speculators increased their combined futures and options positions in New York and London by 8,902 contracts to 325,578 contracts during this period.
US drilling companies are benefiting from the price increase and added 5 new oil wells last week, the fifth consecutive weekly increase in oil and gas rigs.
The Organization of Petroleum Exporting Countries (OPEC) and its allies from abroad in the alliance known as OPEC + decided, last week, to maintain a steady and gradual increase in production.
OPEC is due to release its monthly oil report later this week.
“There will be market interest in the demand reviews that will be conducted in light of expectations of increased demand due to gas-to-oil conversion,” ING Economics said in a note.