The US Oil Fund (NYSEArca: USO), which tracks WTI futures, and the US Oil Fund Brent (NYSEArca: BNO), which tracks Brent futures, rose 1.4% on Monday. Apparently, WTI increased by 1.7% to $ 80.7, while Brent gained 1.6% to $ 83.7.
The Wall Street Journal said oil prices in the US are at their highest level since October 2014, outperforming copper. It may even surpass the largest difference in the commodity price index.
Obviously, even though many analysts warned that the scandal with Evergrande could exacerbate the slowdown caused by the COVID-19 Delta variant, oil continued to rise steadily, which reflects expectations of weak supply to support the energy market.
They also said that despite the resumption of traveling and usage of less fuel, a lack of investment by energy companies in new supplies will prop up prices. And, considering the ongoing global attention to the negative impacts of climate change and the push for renewable energy sources, crude oil shortage will most likely continue to grow.
Some are also betting that the widespread shortage of natural gas and fuel used to power homes and businesses will spill over to the oil market, especially during the winter months, when heating demands increase. Electricity prices in Europe are already skyrocketing, while US natural gas futures have surged to nearly 13-year highs and could rise even higher if cold temperatures boost demand in the coming months.
