Oil prices are likely to continue their ongoing rally after both global benchmarks ending the week more than three percent higher following continued shortages in the global economy. Brent, the international benchmark for two-thirds of the world’s oil, gained three percent over the week and settled 1.02 percent higher at $84.86 per barrel on Friday. Similarly, the US West Texas Intermediate (WTI) gained 3.7 percent for the week and closed 1.2 percent higher at $82.28 per barrel on Friday. The price for Opec Basket was recorded at $82.50 a barrel, Arab Light was available at $83.45 a barrel, while the price of Russian Sokol jumped to $86.20. 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. “We expect high energy prices to continue to dominate media headlines around the world this week and particularly in the US,” a consultancy Energy Aspects report said. “With Brent at $84, a lot of comparisons are being made to 2018, when Brent surged to $86 only to crash below $60 in just two months. But net speculative length is $35 billion lower than in 2018, as many more are long gas, not oil,” the report added.