Oil Prices Extend Gains to Multi-Year Highs Due to Tight Supply
- WTI hits highest since October 2014, Brent hits highest in three years
- Speculators increase their net long positions in US crude -CFTC
- U.S. oil and gas rig numbers drop for first week in 7 – Baker Hughes
LONDON, Oct. 25 (Reuters) – Oil prices extended their pre-weekend gains on Monday to reach multi-year highs, driven by tight global supply and strengthening demand for fuel in the United States and beyond. beyond as economies recover from pandemic-induced collapses.
Brent crude futures rose 81 cents, or 1%, to $ 86.34 a barrel, following last Friday’s 1.1% gain. Earlier Monday, they touched $ 86.43, the highest price since October 2018.
US West Texas Intermediate (WTI) crude futures rose 86 cents, or 1%, to $ 84.62 a barrel after gaining 1.5% on Friday. They hit their highest level since October 2014 at $ 84.76 earlier Monday.
Both references closed last week with slight gains despite the growing number of coronavirus cases in the UK and Eastern Europe, signaling a potentially difficult winter ahead.
“It appears that continued declines in global equities are still widely anticipated in the coming months and only a drop in demand growth could change the underlying sentiment,” said Tamas Varga, oil analyst at PVM Oil Associates, London brokerage firm.
Goldman Sachs said a strong rebound in global oil demand could push Brent crude prices above its year-end forecast of $ 90 a barrel. The bank estimated that the switch from gas to oil could contribute at least 1 million barrels per day (bpd) to oil demand. Read more
After more than a year of declining fuel demand, gasoline and distillate consumption is back at five-year averages in the United States, the world’s largest fuel consumer. Read more
Meanwhile, U.S. 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 (BKR. NOT). Read more
Fund managers raised their net long positions in US crude futures and options during the week to October 19, the US Commodity Futures Commission (CFTC) said on Friday, highlighting the strong market sentiment.
Oil prices have also been supported by concerns over coal and gas shortages in China, India and Europe, which have prompted a switch from fuel to diesel and fuel oil for electricity.
Reporting by Noah Browning Additional reporting by Yuka Obayashi Editing by David Goodman
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