Oil rose for a fifth straight week with the global energy crunch set to boost demand for crude as stockpiles decline from the US to China.
West Texas Intermediate for November delivery gained 0.93 percent to US$73.98 a barrel, up 2.79 percent from a week earlier.
Brent crude for November delivery rose 1.09 percent to US$78.09 a barrel, posting a weekly gain of 3.65 percent.
Photo: Reuters
Global onshore crude supplies sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while US inventories are near a three-year low.
The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.
“The market is pricing in a prolonged impact of supply disruptions and the likely storage draws that will be needed to fulfill refinery demand,” Rystad Energy oil markets analyst Louise Dickson wrote in a note.
In terms of oil demand, “no new lockdowns in Europe, robust recovery in China road activity and the US nixing its ban on foreign travelers from November 2021, all lift prospects for upside in the coming quarters,” Dickson said.
Oil has steadily climbed this month after a period of COVID-19-induced demand uncertainty, with some of the world’s largest traders and banks predicting that prices might climb further amid the energy crisis.
Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs remain high, OPEC has said.
Various underlying oil market gauges are also pointing to an improving market.
The key spread between Brent futures for December and a year later is near US$7, the strongest since 2019. That is a sign traders are positive on the market outlook.
Money managers increased their bullish ICE Brent bets positions to the most in six months, indicating many believe there is yet more room for crude prices to climb.
At the same time, the premium options traders are paying for bearish put options is the smallest since January last year, another indication that traders are less concerned about a pullback in prices.
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