U.S. oil upsurges to peak since 2014 amid global energy crisis

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On Wednesday, US oil prices jumped for the fifth day in a row to their top level since 2014, as signs of tightness in petroleum, natural gas, and coal markets fueled global fears about energy supplies.

Brent crude prices rose for a fourth day on supply concerns, especially after the Organization of Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, opted on Monday to maintain their scheduled output increase rather than increase it further.

WTI oil in the United States hit a high of $79.47 a barrel earlier today, the highest since November 2014. As of 0652 GMT, the market was up 0.53 percent, or 42 cents, at $79.35 a barrel. Brent crude rose 0.6 percent, or 66 cents, to $83.22 a barrel, hovering near the three-year high set the previous day.

OPEC+ decided on Monday to stick to their July agreement to increase output by 400,000 barrels per day (bpd) every month until at least April 2022, phasing out 5.8 million bpd of existing production curbs.

“Crude oil extended gains as investors fret about tightness in the market as the energy crisis hikes demand, “The (OPEC+) increase was well below what the market was expecting, considering the energy crunch across the globe. Not surprisingly, there is speculation that OPEC will be forced to move before the next scheduled meeting if demand continues to surge.”

The OPEC+ Joint Technical Committee (JTC) announced late last month that it expects a 1.1 million bpd supply deficit this year, which might develop into a 1.4 million bpd surplus next year.

Oil prices have increased by more than 50% this year, contributing to inflationary pressures that crude-consuming countries like the United States and India fear may stall recovery from the COVID-19 pandemic. Despite the push to increase output, OPEC+ was concerned that a fourth worldwide wave of COVID-19 infections might stall demand recovery, according to a source.

However, inventory data from the United States, the world’s largest oil user, indicated that gasoline consumption was decreasing. According to the American Petroleum Institute, U.S. oil stocks increased by 951,000 barrels in the week ending October 1, according to the website Oilprice.com. According to the website, gasoline and distillate fuel inventories increased as well, using API data.

Story by : Norvisi Mawunyegah