Crude Oil prices hit a 3-year high on a Friday as concerns over future supply pushed prices higher.
The price of oil rose above $85 for the first time since October 2018 as coronavirus being eased globally has spurred a demand that is forecast to outstrip supply.
Brent crude futures closed Friday up 1% – 86 cents at $84.86 a barrel. For the week, oil closed up 3%, making it a sixth consecutive week of gains for the commodity.
U.S. West Texas Intermediate (WTI) crude futures closed Friday up 1.2% – 97 cents to $82.28 a barrel. On a weekly basis., WTI Crude oil closed 3.5% higher, making it in an eighth straight weekly increase.
Oil has received a big boost after gas prices shot up on supply demands. The commodity has gained favour with large power companies and electricity providers as gas prices skyrocketed. Meanwhile, the resumption of global travel has meant jet airplane companies are once again increasing demand for fuel.
The International Energy Agency said this week that the energy issues are expected to boost oil demand by 500,000 barrels per day (bpd).
Oil and Gas Supply Lines Increasing in the US
The easing of restrictions has opened up ecomioes and travel again. In the US, a sharp fall in oil stockpiles is expected to keep global supply under pressure, However. the soaring demand has prompted some oil and gas companies to reopen drilling in previously closed oil and gas rigs.
The number of oil and natural gas rigs rose for a sixth consecutive week. The U.S. oil and gas rig count, an early indicator of future output, increased10 to 543 in the week to Oct. 15th, the highest since April 2020.
Edward Moya, senior market analyst at OANDA expects prices to continue rising. Moya said:
“It will take a trifecta of events to derail this oil price rally: OPEC+ unexpectedly boosts output, warm weather hits the Northern Hemisphere, and if the Biden administration taps the strategic petroleum reserves.”
