The price of oil increased on Monday as worldwide economic recovery initiated a change in the demand structure of the commodity.
Aramco, A Saudi owned oil producing firm, inflated its official selling price for crude oil. Aramco raised its December official selling price to Asia for its Arab light crude to $2.70 a barrel versus Oman/Dubai crude, up $1.40 from November.
Brent Crude was up by 1% at $83.60 a barrel by 07:45 GMT. US oil gained by 1.1% to $82.16, having declined almost 3% through Friday.
On Saturday, the 11th November 2021, The united stated congress passed an infrastructure bill worth $1 trillion approved by Joe Biden, This bill will increase demand for fuel.
Although china’s export growth decelerated in October 2021, The export figures still managed to crack forecasts. This was as a result of advancement in supply chain compromised by the pandemic and spiking global demand forefront the winter season.
“We can expect overall global GDP growth to hold up energy demand,” said Avtar Sandu, senior commodities manager at Phillip Futures in Singapore, adding “prices can rise higher on tight fundamentals.”
As Saudi Arabia raised the price of its benchmark crude for customers in Asia in December, it exceeded market expectations. The action taken by the oil producers indicates a high level of demand persists in the market, as most major oil producers refuse to increase supply.
The Organization of the Petroleum Exporting Countries and allies such as Russia, together known as OPEC+, agreed to stick to their plan to raise oil output by 400,000 barrels per day from December. However, Biden had called on OPEC+ to produce more crude to supress rising prices.