Oil prices surged yesterday extending multi-week gains as the energy crisis gripping major economies shows no sign of easing amid a pick-up in economic activity and restrained supplies from major producers.
Brent crude was up $1.20 cents or 1.5 per cent at $83.59 a barrel after gaining nearly 4 per cent last week. United States oil was up $1.46, or 1.8 per cent at $80.81 a barrel, the highest since late 2014. US crude rose 4.6 per cent through Friday.
Prices have risen as more vaccinated populations are brought out of coronavirus lockdowns, supporting a revival of economic activity, with Brent advancing for five weeks and US crude for seven.
Coal and gas prices have also been surging as economies recover, making oil more attractive as a fuel for power generation and pushing crude markets higher.
“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,” said Kelvin Wong, commodities analyst at CMC Markets in Singapore.
In India, some states are experiencing electricity blackouts because of coal shortages, while in China the government has ordered miners to ramp up coal production as power prices surge.
The energy crisis sweeping the world is raising the prospect of a difficult northern winter as heating demand rises.