Leap in oil prices pushes Brent Crude pass $83

Leap in oil prices pushes Brent Crude pass $83

Oil prices surged again on Monday, extending multi-week gains on the energy crisis gripping major economies, a pick-up in economic activity and restrained supplies from major producers.

Brent crude was up $1.20 cents, or 1.5%, at $83.59 a barrel by 0656 GMT, after gaining nearly 4% last week. U.S. oil was up $1.46, or 1.8%, at $80.81 a barrel, the highest since late 2014. U.S. crude rose 4.6% through Friday.

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Prices have risen as more vaccinated populations are brought out of coronavirus lockdowns, supporting a revival of economic activity, with Brent advancing for five weeks and U.S. crude for seven.

Coal and gas prices have also been surging as economies recover, making oil more attractive as a fuel for power generation, pushing crude markets higher.

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The energy crisis sweeping the world is raising the prospect of a difficult northern winter as heating demand rises.

The speculator group increased combined futures and options position in New York and London by 8,902 contracts to 325,578 during the period, the commission said.

Drillers in the United States are taking advantage of the increase in prices and added five new oil wells last week, the fifth straight weekly increase in oil and gas rigs.

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The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, last week decided to maintain a steady and gradual increase in production. OPEC releases its monthly oil report later this week.

“There will be interest from the market on what demand revisions will be made, given expectations of a demand boost due to gas to oil switching,” ING Economics said in a note.

 

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