Oil surges to US$80 as global energy crisis threatens supplies
BNN Bloomberg
U.S. crude futures topped US$80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight.
U.S. crude futures topped US$80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight.
Futures in New York rose as much as 2.3 per cent on Friday and are poised for a seventh straight weekly gain, the longest stretch of advances since December. A weakening of the dollar on the back of worse-than-expected U.S. labor market data also boosted the appeal of commodities priced in the currency.
This week brought many indications that supplies will remain constrained: Saudi Aramco said a global natural gas shortage was already boosting oil demand for power generation and heating, and the U.S. Energy Department said that it had no plans “at this time” to tap the nation’s oil reserves.
Saudi Arabia and its partners opted to only modestly increase output in November. Many analysts had expected OPEC+ to deliver a bigger hike as the surge in natural gas prices looks set to cause a further spike in oil demand this winter.
The economic recovery from the pandemic, along with a supply disruption in the U.S. Gulf of Mexico following Hurricane Ida, had already tightened the market before rising natural gas prices spurred additional demand for oil products like diesel and fuel oil.
