Oil was up Monday morning in Asia, continuing multiweek gains. Supply restraints from major producers collided with growing fuel demand as economies continue to re-open and recover from COVID-19.
Brent oil futures rose 1.42% to $83.56 by 11:57 PM ET (3:57 AM GMT), after gaining almost 4% last week. WTI futures jumped 1.93% to 80.88, the highest since late 2014. U.S. crude rose 4.6% through Friday. Both Brent and WTI futures were above the $80 mark.
With more populations coming out of lockdown, including Australia’s Sydney which emerged from a 107-day lockdown, fuel demand has increased and driven prices up. Brent futures have risen for five weeks while WTI futures have gained for seven.
Although coal and gas prices have surged as economic recovery from COVID-19 continues, increasing crude oil inventories in the U.S. after recent draws could impact the black liquid.
“We think crude prices will struggle to climb much higher this quarter and still forecast them to gradually drop next year,” Capital Economics chief commodities economist Caroline Bain said in a note.
U.S. crude inventories rose for a second straight reporting period, according to data from the American Petroleum Institute and the U.S. Energy Information Administration released during the previous week. The Organization of the Petroleum Exporting Countries and allies (OPEC+) also decided to maintain a steady and gradual increase in production at its meeting last week.
“OPEC’s decision to hold back from a bigger than scheduled increase in output is likely to see the market tighten further in the fourth quarter,” Australia & New Zealand Banking Group (OTC:ANZBY) Ltd. senior commodity strategist Daniel Hynes told Bloomberg.