The Brent crude oil price for November exceeded $80 per barrel for the first time in three years, trading data shows. The rally comes as energy demand runs ahead of supply amid post-pandemic recovery of the global economy.
As of 5am GMT, the price of December Brent futures grew by 0.85% to $79.36 per barrel, while November futures jumped by 0.83%, to $80.19, reaching $80.35 earlier on Tuesday. US benchmark West Texas Intermediate (WTI) November futures were also up, gaining 0.85% to $76.09 a barrel.
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The rise in oil prices comes amid signs of an improving outlook for global energy demand. At the same time, global refineries are failing to keep up, as supply is growing at a slower pace despite the efforts of OPEC. The group and its allies, including Russia, have been easing supply curbs initially introduced at the height of the Covid-19 pandemic. Markets are also awaiting a new OPEC forecast on global oil outlook later on Tuesday, which will detail the group’s views on market fundamentals.
Market experts say prices could continue to grow, with fuel demand projected to reach pre-pandemic levels by early next year.
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“Oil demand could rise by 500,000 barrels a day as high gas prices are forcing consumers to switch to other feedstocks,” Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia, told Bloomberg. The expert says this will increase the supply deficit in the markets, especially given the fact that OPEC and allies’ production increase of 400,000 barrels a day each month will add only about 2% to the world’s supply by the end of the year.
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