Oil standards are at their highest levels since 2014 due to global supply shortages – News Couple

Oil standards are at their highest levels since 2014 due to global supply shortages

Oil prices rose to their highest levels since 2014 on Tuesday, buoyed by tight global supplies and strong demand in the United States, the world’s largest consumer.

The rally came ahead of US inventory reports from the American Petroleum Institute (API), an industry group, on Tuesday and the US Energy Information Administration on Wednesday.

Analysts expect the latest weekly US oil inventories data to show an increase of 1.9 million barrels in crude oil inventories.

Brent crude futures rose 41 cents, or 0.5%, to settle at $86.40 a barrel, while US West Texas Intermediate crude finished 89 cents, or 1.1%, up at $84.65.

That was the highest close for both global benchmarks since October 2014.

“The energy crisis is still close to abating, so we expect prevailing strength in oil prices in November and December as supply lags in demand and OPEC+ remains on the sidelines,” said Louise Dixon, senior oil markets analyst at Rystad Energy.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, is currently increasing production by 400,000 barrels per day each month, but has backed away from calls for faster production in response to higher prices.

“Crude oil prices continue to rise and calls for OPEC to increase production continue to fall to deaf ears. The only thing that will motivate OPEC+ is that if US operators indicate that they will increase production,” said Edward Moya, chief market analyst at OANDA. Noting that “a rise to $90 seems likely for oil.”

Goldman Sachs said Brent was likely to exceed its year-end forecast of $90 a barrel, while Larry Fink, CEO of BlackRock, the world’s largest asset manager, said there was a high probability that oil could hit $100.

With oil and gas prices at multi-year highs, US shale producers are poised to make their strongest profits since the coronavirus pandemic, as long as they don’t maintain sales tied to much lower prices.

While the inflamed energy and coal markets in China have cooled somewhat after the government’s intervention, energy prices have remained high around the world as temperatures drop with the onset of the northern winter.

US gasoline and distillate consumption is back in line with the five-year averages after more than a year of lower demand, and the market will closely monitor US inventory levels.

US President Joe Biden will discuss energy prices, Iran’s nuclear program and supply chain issues during his trip to Europe this week for the G20 leaders’ meeting.

A shipment of 2.1 million barrels of Iranian condensate, the latest shipment from a swap deal between the Middle Eastern country and Venezuela, is expected to begin offloading on Wednesday at the PDVSA port.

Avtar Sandhu, senior commodity manager at Phillip Futures in Singapore, said traders were waiting for clarification on the outcome of international talks on reviving the 2015 Iran nuclear deal, after the US said efforts were at a “crucial point” that could reopen the way for exports. Iranian oil.

(Additional reporting by Aaron Sheldrick in Tokyo and Dmitri Zhdanikov in London; Editing by Margarita Choi and David Evans)

(The title and image for this report may have been reworked only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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