Daily Times

Crude oil prices rose up to one percent on Friday on increasing signs of robust demand amid supply concerns due to rocketing gas and coal prices.

At 1250 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.83 (+0.99 percent) to reach $84.83 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $81.89 a barrel, up by $0.58 (+0.71 percent).

The price for Opec Basket was recorded at $81.79 a barrel with 0.70 percent decrease, Arab Light was available at $83.45 a barrel with a 1.15 percent increase, while the price of Russian Sokol jumped to $86.20 after gaining 1.20 percent.

The experts pointed to a sharp drop in OECD oil stockpiles to their lowest level since 2015. Demand has picked up with the recovery from the Covid-19 pandemic, with a further boost coming from industry turning away from expensive gas and coal to fuel oil and diesel for power.

They said the fact that Asian markets are content to chase prices higher at weekly highs, instead of lurking on price dips, is a strong signal that energy demand remains robust.

The International Energy Agency on Thursday said the ongoing moves by Opec+ to ease its production cut deal could reverse the global inventory draw by the middle of next year. In its latest Oil Market Report (OMR), the Paris-based energy watchdog forecasts demand to rise by 5.5mn b/d to 96.3mn b/d in 2021, and by 3.3mn b/d to 99.6mn b/d in 2022, slightly above pre-Covid levels. These are up from a respective 96.1mn b/d and 99.4mn b/d in last month’s report.

It said the effects on its forecasts of fuel switching are tempered by a weaker economic outlook. “The higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery,” the IEA said.