Oil prices have more than doubled in the last 12 months as the global economy recovers from the epidemic.
Oil prices rose on Monday, boosting pre-weekend profits to multi-year highs as global supply was tight amid strong fuel demand in the United States and elsewhere in the world as economies emerged from the coronavirus epidemic-induced recession.
US West Texas Intermediate (WTI) crude futures rose 1.5 percent on Friday to 62 cents, or 0.7 percent, at .3 84.38 a barrel at 06:46 GMT. They touched their highest since October 2014 – $ 84.76 – before the session.
Brent crude futures rose 56 cents, or 0.7 percent, to .0 86.09 a barrel, after gaining 1.1 percent last Friday. The deal previously hit an all-time high of 86 86.43 since October 2018.
“Due to strong energy demand in the United States, the tone of the oil market was fairly strong, which prompted some speculators to refrain from small positions,” said Tetsu Emory, CEO of Emory Fund Management Inc.
Oil prices have more than doubled in the last 12 months, fueling inflationary concerns as the global economy recovers from the displacement caused by the coronavirus epidemic. While costs have risen, the Organization of Petroleum Exporting Countries and its allies have been reluctant to ease the tightening supply cuts imposed in 2020 to save prices. This has taken Brent to its highest since 2018 as stocks have dwindled and the original timepred balloon.
Modifications to the pipeline
Meanwhile, U.S. energy companies cut oil and natural gas for the first time in seven weeks last week despite rising oil prices, energy services firm Baker Hughes Co. said in a report closely followed on Friday.
Money managers extended their net long U.S. crude futures and options positions for the week until Oct. 19, the U.S. Commodity Futures Trading Commission (CFTC) said Friday, underlining strong market sentiment.
Concerns over coal and gas shortages in China, India and Europe have also pushed up oil prices, which has fueled the shift to diesel and fuel oil for electricity.
However, analysts warned that there may be some correction in the coming weeks as sharp rise in crude prices has led to a sense of caution.
“The percentage increase in WTI so far this year has reached the levels of 2007 and 2009 when we also saw a steep rally, suggesting that it has become a bit higher,” Emory said.
WTI futures contracts are currently in a very backward position, meaning that the next-day contract trades at a lower price than the current contract. Oil prices are usually traded in the following months, reflecting the cost of oil storage.
Toshitaka Tazawa, an analyst at Fujitomi Securities Co., Ltd., said: