Brent crude oil, a benchmark for oil prices, surpassed $80 a barrel amid signals of higher demand than supply, further reducing inventory amid a global energy crunch.
According to Bloomberg News on the 28th (local time), Brent crude oil rose for six consecutive days, the highest since October 2018. The U.S. West Texas Crude Oil (WTI) also expanded its gains.
The recent rise in oil prices comes amid speculation that banks and traders are not investing enough in fossil fuels to maintain supply at the current level, further rising natural gas, and the energy industry.
Amid the launch of vaccines to fight the COVID-19 pandemic, the rise in energy demand has prompted a drop in U.S. crude oil inventories this year.
The surge in natural gas demand has spread to increased demand for crude oil in the process of users looking for alternatives, triggering expectations that prices will rise.
Oil-producing countries such as the OECD and Russia have been cautious about curbing the supply of crude oil despite growing global demand for crude oil.
OPEC is scheduled to announce its global oil price outlook in the afternoon of the 28th. This outlook will elaborate Opec’s view of market fundamentals.
According to BP, global oil consumption is expected to return to pre-COVID-19 pandemic levels in the third quarter of 2022.
Demand is expected to increase by an average of 3.8 million barrels a day compared to the previous year.
In backwardation, Brent’s immediate price gap (spread) widened from 63 cents a barrel two weeks ago to 81 cents a barrel.