Oil prices extend gains to multi-year highs on tight supply
Oil prices climbed on Monday, extending pre-weekend gains to hit multi-year highs as global supply remained tight amid solid fuel demand in the United States and elsewhere in the world as economies pick up from coronavirus pandemic-induced slumps, News.Az reports citing Reuters.
U.S. West Texas Intermediate (WTI) crude futures rose 87 cents, or 1.0%, to $84.63 a barrel at 0342 GMT, after gaining 1.5% on Friday. It touched its highest since October 2014 - $84.76 - earlier in the session.
Brent crude futures increased 71 cents, or 0.8%, to $86.24 a barrel, following on from last Friday's 1.1% gain. The contract earlier hit its highest since October 2018 of $86.43.
After more than a year of depressed fuel demand, gasoline and distillate consumption is back in line with five-year averages in the United States, the world's largest fuel consumer. read more
Meanwhile, U.S. energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, energy services firm Baker Hughes Co said in its closely followed report on Friday. read more
Money managers raised their net long U.S. crude futures and options positions in the week to October 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday, underlining strong market sentiment.
Oil prices have also been bolstered by worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power.
But analysts warn there may be some corrections in the coming weeks as the sharp rise in crude prices has led to a growing sense of caution.