Oil prices rise year-on-year due to Kovid recovery, power generator demand boosts by Reuters

ছবি Photo from Reuters file: General view of Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. Router / Ahmed Jadallah

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices hit a year-on-year high on Monday as demand continued to recover from the Kovid-1 pandemic epidemic, pushing for more expensive gas from power producers and more custom to lean from coal to fuel oil and diesel.

The futures rose 87 cents, or 1%, to $ 85.73 a barrel by 0111 GMT, the highest price since October 2018.

US West Texas Intermediate (WTI) crude futures rose $ 1.12, or 1.4%, to 83 83.40 a barrel, the highest since October 2014.

Both contracts rose at least 3% last week.

Analysts at ANZ Bank said in a note on Monday that “easing sanctions around the world could help recover fuel costs.”

“The jet fuel market was buoyed by the news that the United States would open its borders to vaccinated foreign travelers next month. Similar measures have been taken across Australia and Asia.”

They added that switching to gas-to-oil for power generation alone could increase demand by 450,000 barrels per day in the fourth quarter.

Still, supplies from the United States could rise, with fuel companies adding oil and rig for the sixth week in a row last week as rising crude prices prompted drillers to return to the Wellpad.

The U.S. oil and gas rig count, the primary index for future production, rose to 10 from 543 per week on October 15, the highest since April 2020, energy service firm Baker Hughes Co said last week.

Meanwhile, China’s economy grew at its slowest pace in a year in the third quarter, possibly due to power shortages, supply disruptions and the outbreak of the Covid-1 outbreak.

The world’s second-largest oil consumer has released a new batch of oil import quotas for independent refineries for 2021, showing that the total annual allowance is lower than last year, the first reduction in import permits since these companies entered the market in 2015.

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