Reuters File Photo: Pipelines run on their crushing oil storage tank at Enbridge Inc. at their tank farm in Cushing, Oklahoma, March 24, 2016. Reuters / Nick Oxford
Written by Aaron Sheldrick
TOKYO (Reuters) – Oil prices rose again at the moment, boosting profits for several weeks due to the energy crisis in major economies, disrupting economic activity and cutting off supplies from major producers.
After gaining about 4% last week, it rose $ 1.18 cents, or 1.4%, to .5 83.57 a barrel by 0603 GMT. US oil rose 1. 1.49, or 1.9%, to .8 80.84 a barrel, the highest since late 2014. Up 4.6% as of Friday.
Prices have risen as more vaccinated populations have been brought out of the coronavirus lockdown, helping to revive economic activity, with Brent up for five weeks and U.S. crude at seven.
Coal and gas prices are also rising as the economy is recovering, making oil more attractive as a fuel for power generation, pushing the crude market higher.
Kelvin Wang, a product analyst at CMC Markets in Singapore, said: “There is no direct news flow, the move is dynamic where high-expected inflation means inter-market factors are contributing to the rise in oil prices.”
In India, some states are facing power outages due to the coal crisis, while in China, the government has instructed miners to increase coal production due to rising electricity prices.
The global energy crisis is raising the possibility of a tough northern winter as heat demand increases.
Fund managers extended their net long position in U.S. crude futures and options for the week until Oct. 5, the Commodity Futures Trading Commission said Friday.
During this time, Speculator Group increased its combined futures and options position in New York and London from 8,902 to 325,578, the commission said.
Drillers in the U.S. are taking advantage of price increases and added five new oil wells last week, the fifth consecutive weekly increase in oil and gas rigs. [RIG/U]
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, last week decided to maintain a stable and gradual increase in production.
OPEC released their monthly oil report later this month.
ING Economics said in a note that “there will be interest from the market on what demand will be corrected based on the expectation of increased demand due to switching from gas to oil.”
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