U.S. oil prices rose in early trading on Friday. With the global competition for winter natural gas and coal supplies, the U.S. benchmark WTI price reached $80 per barrel and continued to rise for a week.
As of 10:29 am Eastern Time on Friday, WTI crude oil rose 2.03% to US$80.05, and the international benchmark Brent crude oil rose 1.76% to US$83.39.
In the context of limited supply and increased demand, oil prices rose 4% this week. This is also due to the conversion of natural gas to oil due to the historical highs of natural gas prices in Europe and Asia.
Despite calling on consumer countries, including the United States, to increase supply, OPEC+ Group decided on Monday to keep the relaxation of production reduction plans unchanged, thus starting this week’s oil price hike. OPEC+ will increase its supply by 400,000 barrels per day in November-this is the lowest level expected by the market before the meeting. As a result of this decision, WTI crude oil prices hit their highest level in seven years.
After the EIA reported that crude oil inventories increased and global energy prices fell, oil prices fell on Wednesday after Russian President Vladimir Putin hinted that Russia may increase its supply of natural gas to Europe this winter.
On Thursday, after reports that the US Department of Energy was withdrawing previous comments that it was considering releasing its strategic oil reserves and banning crude oil exports, prices reversed their decline.
The tightening of energy supply before winter continues to support oil prices in early Friday trading. "U.S. commercial distillate stocks-including diesel fuel for public transportation and industrial use and winter heating-measured on the basis of demand coverage, have fallen to their lowest level since 2000," Vanda Insights said.
Saxo Bank said on Friday: “In general,The risk of market tightening in the winter has not disappeared, especially the prospect of converting natural gas to oil may increase another level of demand for crude oil. "The bank's strategy team added: "The increase in Brent crude oil prices may make it target the 2018 high of $86.74.
(Source: oilprice)
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