US oil price reached $85 a barrel as demand continues to rise – News Couple

US oil price reached $85 a barrel as demand continues to rise

US oil prices rose above $85 a barrel on Monday for the first time in seven years, as traders bet that crude supplies will not keep pace with rapidly rising global demand, and analysts said a broader energy crisis is spreading to oil markets.

The latest price hike came as Goldman Sachs estimated that global oil demand has now almost fully recovered from the collapse caused by the coronavirus last year and will “soon” reach its pre-pandemic peak of 100 million barrels per day, as Asian economies rebound From a wave of delta variable infection.

The bank said higher natural gas prices in Asia are also prompting consumers to buy more oil for power generation – an unexpected consequence of the energy crisis that has added at least 1 million barrels per day to global demand.

US West Texas Intermediate crude rose 2 percent to a high of $85.41 a barrel on Monday morning before easing back to $83.84, lifting it just 0.1 percent for the day.

Brent crude, the global benchmark, rose 1.3 percent on Monday to $86.62 a barrel.

Meanwhile, US stocks rose to highs after a slight dip at the end of last week.

The benchmark S&P 500 index rose 0.5 percent in early afternoon trade, putting it on track for a second record close in the past three sessions. This rally was led by consumer-focused stocks and companies that will benefit from higher commodity prices.

The heavy Nasdaq Composite rose 0.9 percent, although it remained about 1.2 percent below its all-time high in September.

Electric car maker Tesla was among the biggest, up 9.3 percent, and became the first automaker to reach a $1 trillion market capitalization after rental company Hertz said it had ordered 100,000 of its vehicles.

Moves in the biggest tech companies like Facebook, Amazon and Apple have been more muted as investors await a flurry of third-quarter earnings announcements. Facebook is due to announce its latest results after markets close on Monday, while Microsoft and Apple will follow up later in the week.

More than 300 companies in the Wall Street blue chip index will report in the next two weeks — equivalent to 59 percent of the S&P 500’s market capitalization, according to an analysis from Credit Suisse.

Those expected updates for companies come after shares in social media platform Snap tumbled more than a quarter on Friday in response to the company’s warning of falling advertising revenue. Other tech leaders, including Facebook, have suffered indirect losses in the wake of the Snap report.

European shares changed little on Monday. The region-wide Stoxx 600 closed 0.1 per cent, while London’s FTSE 100 rose 0.3 per cent.

In Asia, Hong Kong’s Hang Seng closed almost flat as improvements in healthcare and industrial stocks were damped by lower property stocks after Beijing said over the weekend that it would expand its property tax trials.

In the government debt markets, the yield on US 10-year Treasuries, which declines as prices rise, fell 0.02 percentage points to 1.63 percent, while the yield on the equivalent British Treasuries fell 0.04 percentage points to 1.14 percent.

Central banks around the world are thinking about how to respond to spreading inflationary pressures. How Bell, chief economist at the Bank of England, told the Financial Times last week that the UK’s headline rate of inflation could exceed 5 per cent next year.

The European Central Bank is due to meet on Thursday, with meetings arranged in early November for the US Federal Reserve and the Bank of England.

We think the central banks will have to clarify. . . “Market rates are at their upcoming meetings,” said Sami Sharr, chief economist at Lombard Odier, noting that increases have been priced in “close to now in the UK,” for the second or third quarter of next year in the US, and even a launch from the central bank. European Union by the end of 2022.

US economic growth data is due on Thursday and economists expect gross domestic product to expand 3.2 percent year-on-year in the July-September quarter, compared with an expansion of 6.7 percent in the second quarter.

What are you watching in the market today?

Germany: Figures last week showed that business activity in the euro zone was growing at the slowest pace in six months, as companies grapple with supply chain problems and rising energy prices. Another indication of how companies in Germany are coping with challenging conditions will be when the Ifo Institute releases its closely watched monthly Business Climate Index.

UK policy: Budget week kicks off in the UK. Chancellor Rishi Sunak will present both the regular budget and government spending review on Wednesday, so watch out for some last-minute pleas from Whitehall administrations and lobby groups across the country as they push for more money.

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