Oil prices surge amid tight supply and high demand

Oil prices surge amid tight supply and high demand

Oil prices saw a massive surge in the morning trade on Monday. They extended the pre-weekend gains. Now, they have hit multi-year highs. Moreover, the global demand is going up while the supply is getting tightened in the US and other economies of the world. Nations trying to rise up from the coronavirus slump are also making the situation worse. 

The US WTI crude futures surged 1 per cent to USD 84.63 per barrel or 87 cents at 0342 GMT. Notably, it had gained 1.5 per cent on Friday. In the earlier session, it reached the highest since October 2014, which is USD 84.76. 

The Brent crude futures rose to USD 86.24 after rising 0.8 per cent or 71 cents. It had gained 1.1 per cent during the last Friday. It was the highest rise of the contract since October 2018. It had reached USD 86.43. 

Emori Fund Management’s chief executive officer Tetsu Emori said that the tone of the oil market stayed quite strong with continuous fuel demand in the US amid tight supply. 

Moreover, the consumption of distillate and gasoline is also back on track after the poor and depressed fuel demand for more than a year. It is in sync with the United States’s five-year averages. 

Meanwhile, for the first time in seven weeks, US energy firms cut short natural gas and oil rigs last week. It happened following the rise in oil rates. Baker Hughes Co, energy services firm said in a report on Friday. 

In the week to Oct 19, Money managers hiked their net log United Staes Crude options and futures positions. CFTC (Commodity Futures Trading Commission) stated it on Friday while underlining strong market sentiment. 

In China, the worries regarding gas and oil shortages have burgeoned oil prices. It has led European nations to switch their oil preferences to diesel for power. 

However, analysts believe that there may some corrections in the following weeks because rising crude prices have triggered a sense of caution. 

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