- Brent highest since October 2018, WTI highest since July
- As OPEC reopens the taps, African giants lose the race to pump more
- Soaring LNG and coal prices could push oil prices further
TOKYO, Sept.28 (Reuters) – Oil markets climbed for a sixth day on Tuesday, reversing earlier losses, amid fears of tight supply, as liquefied natural gas (LNG) and coal prices soar also provided support.
Brent crude futures gained 55 cents, or 0.7%, to $ 80.08 a barrel at 5:10 a.m. GMT, after hitting their highest since October 2018 at $ 80.35 earlier in the session. It jumped 1.8% on Monday.
US West Texas Intermediate (WTI) crude futures rose 57 cents, or 0.8%, to $ 76.02 a barrel, reaching their highest level since July 6. It jumped 2% the day before.
Investors remained bullish as the supply disruptions in the United States due to hurricanes continue longer than expected at a time when demand resumes due to the easing of lockdowns and the wider deployment of the COVID-19 vaccination, âsaid Chiyoki Chen, chief analyst at Commerce in the Sun.
Hurricanes Ida and Nicholas, which swept through the Gulf of Mexico in the United States in August and September, damaged platforms, pipelines and processing centers, cutting off most offshore production for weeks. Read more
Also weighing on supply, Africa’s major oil exporters Nigeria and Angola will find it difficult to increase production up to quotas set by the Organization of the Petroleum Exporting Countries (OPEC) at least until next year, as underinvestment and nagging maintenance issues continue to hamper production, sources warn their respective oil companies. Read more
Their battle mirrors that of several other members of the OPEC + group who have cut production over the past year to support prices when COVID-19 hit demand, but fail to scale up production to meet growing global needs. in fuel as economies recover. Read more
Supply issues are occurring as countries relax their movement restrictions related to COVID-19, potentially increasing demand.
Japan, the world’s fifth-largest oil user, plans to lift the coronavirus state of emergency in all regions on Thursday as the number of new cases declines and pressure on the medical system eases, said the Minister of Economy Yasutoshi Nishimura. Read more
Analysts also say higher prices for liquefied natural gas (LNG) and spot coal could support rising oil prices.
“Demand for oil could increase by an additional 0.5 million barrels per day, or 0.5% of global oil supply, as high gas prices force a shift from gas consumption to oil consumption Commonwealth Bank commodities analyst Vivek Dhar said in a note.
He added that energy prices could recover from here if the northern hemisphere’s winter turns out to be colder than expected.
China is in the throes of an energy crisis as a shortage of coal supplies, stricter emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered general restrictions on use. Read more
Reporting by Yuka Obayashi; Editing by Stephen Coates and Christian Schmollinger
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