International oil benchmark Brent crude crossed 80 800 a barrel on Tuesday for the first time in nearly three years amid growing signs of an energy crisis.
Oil prices have risen nearly a quarter since last month as concerns over the slowdown in the Delta alternative global economic recovery have subsided. Rising natural gas prices are also affecting the oil market, analysts say, as some industrial users of gas move to oil and other fuels.
This may be the first time that “gas affects oil, not the other way around,” said Carlos Torres Diaz, head of gas and electricity at consulting firm Restad Energy.
Brent crude rose 80 80.70 a barrel on Tuesday. West Texas Intermediate Crude, the U.S. benchmark, reached a three-year high of 76 76.64 a barrel.
Analysts say the disruption caused by Hurricane Eder, which damaged oil platforms and infrastructure in the Gulf of Mexico in late August, exceeded the slight increase in production in July in agreement with the Organization of Petroleum Exporting Countries.
Its allies, including OPEC and Russia, are likely to be under pressure to speed up their supply-side plans if the group meets via teleconference on October 4.
Long lines at Britain’s gas stations, when fuel truck drivers are in short supply instead of oil, could add upward pressure to prices.
Analysts at Goldman Sachs recently predicted that Brent would exceed 90 900 a barrel in December, noting that they are burning at what they have described as a record rate worldwide.
“The current global oil supply-demand deficit is larger than we expected,” they wrote.
At the same time, analysts said the successful coronavirus vaccine program “is leading to the relaunch of many more countries, including international travel.”
Aviation fuel lags far behind in recovering global oil demand, and will therefore be an important factor in strengthening the pick-up market for air travel.