Global oil prices have climbed for a sixth day on Tuesday. The main reason for the euphoria on the oil market is investor concerns about tight supply. An additional growth factor is permanently rising prices for liquefied natural gas and coal.
While writing this article, Brent oil futures for November grew by 1.4% up to $80.64 per barrel. At the same time the day before, Brent hit the highest level since October 2018, breaking down the mark of $80.35. In general, the crude prices for this brand began to surge at the end of August. However, a really breathtaking hike began on September 21.
WTI futures showed a similar trend, gaining 1.4% to $76.53 a barrel today. It has been an all-time high since July 2021. At the close the day before, WTI crude oil rose by 2%.
Today, the crude oil market participants keep a bullish mood steadily. Besides, this time investors have enough reasons to be positive.
First, US supply disruptions due to hurricanes in the Gulf of Mexico dragged on for a longer period than initially expected. As a result of the natural disaster, pipelines and technical equipment were damaged, which caused a halt in oil production for several weeks.
Secondly, demand for oil is increasing significantly due to easing lockdown measures and the wider rollouts COVID-19 vaccination.
Another bullish factor for the market was the fact that Nigeria and several other OPEC+ members have had some difficulty expanding oil production to target levels for several months in a row.
Besides, a significant incentive to raise global oil prices may become a surge in liquefied natural gas and coal on the spot market.
Analysts expect that oil demand may increase by another 0.5 million barrels per day in the short term. Experts interpret their forecast for the future in a very simple way: a rise in gas costs will be a stimulus to oil consumption.
Prices for energy carriers may exceed $100/bbl in the first quarter of the next year amid severe winter. Taking into account these facts, analysts are confident about rather favorable prospects for the world's oil producing companies.
