Crude oil price spiked again this week as energy crisis hitting developed countries continues to ravage despite an increase in macro economic indicators.
Brent crude increased by 1.5%, at $83.59 a barrel by 06:56 GMT, after gaining nearly 4% last week. U.S. oil was up $1.46, or 1.8%, at $80.81 a barrel, representing the highest since late 2014. U.S. crude rose 4.6% through Friday.
As covid 19 lockdown continues to ease due to higher vaccination rate the price of oil has risen with brent oil surging over 5 weeks.
As more countries faces severe energy crisis leading to increase in coal and gas prices, the usage of oil has created a more feasible utility as fuel for generating power. this activity has leas to a push in price in the crude oil market.
CMC Markets analyst Kelvin Wong said “There’s no direct news flow, the moves are momentum driven where intermarket factors implying higher expected inflation are supporting the bullish move in oil prices”
The shortage of coal in countries like china and India has lead to intensive efforts from the mining and quarrying sectors to intensify production efforts.
USA Drillers are utilizing the energy shortfall to their advantage adding five new oil wells last week, the fifth straight weekly increase in oil and gas rigs.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, last week decided to maintain a steady and gradual increase in production.
“There will be interest from the market on what demand revisions will be made, given expectations of a demand boost due to gas to oil switching,” ING Economics said in a note.