Tokyo, Jan. 17 (BNA): Oil prices rose on Monday, with Brent crude futures hitting their highest levels in more than three years, as investors bet on supply staying tight amid production curbs by major producers with global demand unaffected by the coronavirus variable. Omicron. .
Brent crude futures rose 42 cents, or 0.5 percent, to $86.48 a barrel by 0022 GMT. The contract touched its highest level since October 3, 2018 – $86.71 – earlier in the session.
US West Texas Intermediate crude rose 62 cents, or 0.7 percent, to $ 84.44 a barrel, after reaching $ 84.78, its highest level since November 10, 2021, earlier in the session.
The gains followed a rally last week when Brent rose 5.4% and WTI rose 6.3%.
Feverish oil buying, spurred by supply disruptions and signs that the Omicron variable will not be as disruptive as feared for fuel demand, has pushed some crude grades to multi-year highs, suggesting the rally in Brent crude futures could continue for much longer. , as traders say, according to Reuters.
“The bullish sentiment continues because (group of producers) OPEC+ is not providing enough supply to meet strong global demand,” said Toshitaka Tazawa, analyst at Fujitomi Securities Co., Ltd.
“If (investment) funds increase the weight of allocations to crude, prices may reach their highest levels in 2014,” he said.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies – OPEC + – are gradually easing production cuts that were implemented when demand collapsed in 2020.
But many small producers cannot increase supplies and others have been wary of pumping too much oil in the event of renewed coronavirus setbacks.
Fears that a Russian attack on neighboring Ukraine could disrupt energy supplies have also led to price support.
US officials expressed concerns on Friday that Russia was preparing to attack Ukraine if diplomacy failed. Russia, which has massed 100,000 soldiers on the Ukrainian border, posted pictures of its troops on the move.
The US government has held talks with several international energy companies about contingency plans to supply Europe with natural gas if the conflict between Russia and Ukraine disrupts Russian supplies, two US officials and two industry sources told Reuters on Friday.
US crude oil stocks, meanwhile, fell more-than-expected to their lowest since October 2018, but gasoline stocks jumped due to weak demand, the Energy Information Administration said on Wednesday.
An analyst at Fujitomi Tazawa said concerns about supply constraints overshadowed news that China might release oil from reserves.
Sources told Reuters that China plans to release oil reserves around the Lunar New Year holiday between January 31 and February 6 as part of a plan coordinated by the United States with other major consumers to lower global prices.
HF