NEW YORK: Oil rose on Friday, gaining about 4 per cent on the week as a global energy crunch boosted US prices to their highest in almost seven years as big power users struggle to meet demand.
Even with worldwide demand growing as economic activity rebounds from pandemic lows, the Organization of the Petroleum Exporting Countries and allied producers (Opec+) this week said they would remain on the path of gradually bringing back production, report agencies.
Brent crude futures rose 44 US cents or 0.5 per cent to settle at US$82.39 a barrel. Earlier in the week, the global benchmark hit a 3-year high of US$83.47.
West Texas Intermediate (WTI) crude rose US$1.05 or 1.3 per cent to end at US$79.35. That was the highest close for the US benchmark since Oct 31, 2014.
US petrol futures also closed at their highest since October 2014 on Friday.
“The fundamental backdrop is one of tight supplies that is going to continue to push these prices steadily higher,” said John Kilduff, a partner at Again Capital in New York.
As energy markets have tightened in the face of improved fuel demand, many fear that a cold winter could further strain natural gas supplies. China ordered miners in Inner Mongolia to ramp up coal production to alleviate its energy crunch.
Benchmark European gas prices at the Dutch TTF hub on Friday stood at a crude oil equivalent of about US$200 a barrel, based on the relative value of the same quantity of energy from each source, according to Reuters calculations based on Eikon data.
“An acceleration in gas-to-oil switching could boost crude oil demand used to generate power this coming northern hemisphere winter,” an ANZ commodities analyst said in a note.
ANZ increased its 2021 fourth-quarter crude oil demand forecast by 450,000 barrels per day.