Oil prices scale $85/bbl on back of supply deficit
Send a link to a friend
[October 15, 2021] By
Shadia Nasralla
LONDON (Reuters) -Oil prices hit a fresh
three-year high on Friday, climbing above $85 a barrel on forecasts of a
supply deficit over the next few months as rocketing gas and coal prices
stoke a switch to oil products.
Brent crude futures were up 80 cents, or 0.95%, to $84.80 a barrel at
0930 GMT. Front-month prices, which earlier touched their highest since
October 2018 at $85.10, are set to climb for the sixth straight week,
heading for a 3% hike this week.
U.S. West Texas Intermediate (WTI) crude futures rose 73 cents, or 0.9%,
to $82.04 a barrel. The contract is heading for a 3.3% gain on the week,
up for the eighth consecutive week.
Strong stock markets on both sides of the Atlantic, often traced by oil
prices, also gave a boost. [MKTS/GLOB]
Analysts pointed to a sharp drop in OECD oil stockpiles to their lowest
level since 2015. Demand has picked up with the recovery from the
COVID-19 pandemic, with a further boost coming from industry turning
away from expensive gas and coal to fuel oil and diesel for power.
![](http://archives.lincolndailynews.com/2021/Oct/15/images/ads/current/charrons_bch041713.png)
"The fact that Asian markets are content to chase prices higher at
weekly highs, instead of lurking on price dips, is a strong signal that
energy demand remains robust," OANDA senior analyst Jeffrey Halley said
in a note.
The International Energy Agency on Thursday said the energy crunch is
expected to boost oil demand by 500,000 barrels per day (bpd).
[to top of second column] |
![](../images/101521pics/2021-10-15T023208Z_2_LYNXMPEH9E034_RTROPTP_4_GLOBAL-OIL_small.JPG)
Crude oil storage tanks
are seen in an aerial photograph at the Cushing oil hub in Cushing,
Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base/File Photo
![](http://archives.lincolndailynews.com/2021/Oct/15/images/ads/current/graue_21BLAZER_081621.png)
That would result in a supply gap of around 700,000 bpd through the end of this
year, until the Organization of the Petroleum Countries and allies, together
called OPEC+, add more supply, as planned in January.
"We maintain the view that we have held all year - that the oil market remains
in the early days of a multi-year, structurally strong cycle," RBC analyst
Michael Tran said in a note.
Investors shrugged off a higher than expected gain in U.S. crude stocks last
week as refinery crude runs fell.
Crude inventories rose by 6.1 million barrels in the week to Oct. 8 to 427
million barrels, compared with analysts' expectations in a Reuters poll for a
702,000-barrel rise, the Energy Information Administration said on Thursday.
(Additional reporting by Sonali Paul in Melbourne and Florence Tan in
SingaporeEditing by Mark Potter)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |