Futures rallied last week on concerns that rising consumption is racing ahead of supply. Oil prices rose early on Thursday, with Brent Crude rallying to $86.10—the highest price since October 2018. New York crude settled at a fresh seven-year high on Wednesday and closed Friday at $83.76. According to government data, US crude inventories fell by 431,000 barrels the week before last compared with a Bloomberg survey that had forecast a fourth weekly increase. Gasoline and distillate inventories also decreased more than expected. The market has tightened significantly as coal and natural gas shortages drive greater crude consumption, underpinning a rally in prices.
US crude futures posted an eighth straight weekly gain, the longest stretch of advances since 2015. Brent crude topped $85 a barrel in London for the first time since 2018, the latest milestone in a global energy crisis that has seen prices soar. The global benchmark rose above that level in intraday trading but did not settle above it on Friday. West Texas Intermediate for November settlement rose 97 cents to settle at $82.28 a barrel. Brent for December delivery added 86 cents to settle at $84.86 a barrel. The shortage of gas and coal is triggering extra demand for oil products from the power market. It’s also depleting stockpiles: the biggest US storage hub at Cushing recorded a considerable supply decline for this time of year.
West Texas Intermediate crude closed above $80 a barrel on Monday for the first time since late 2014 as a growing power crisis from Europe to Asia boosts demand for oil ahead of winter.