Oil futures rose yesterday and were near multi-year highs as an energy supply crunch continued across the globe, while falling temperatures in China revived concerns over whether the world’s biggest energy consumer can meet domestic heating needs.
The Brent crude benchmark rose 75 cents to settle at $85.08 a barrel. United States West Texas Intermediate (WTI) futures rose 52 cents to settle at $82.96 a barrel.
Prices have been climbing the last two months. Since the start of September, Brent has risen by about 19 per cent , while WTI has gained around 21 per cent .
Temperatures in China, the world’s biggest energy consumer, are forecast to fall to near freezing in northern areas, according to AccuWeather.com.
The WTI crude hovering at 7-year highs around $83 a barrel as traders evaluate the energy crunch roiling markets and falling temperatures in China. The OPEC+ alliance has been struggling to add crude back to the market, in particular from members such as Angola and Nigeria due to lack of investment and exploration. Also, power generators continue to switch from expensive gas and coal to oil and diesel as major industrial countries face power shortages. Still, US oil production is growing and output is likely to increase further in the US largest shale, according to an official report.
Brent oil has been tipped to continue its upwards surge after hitting the highest level in three years.