Daily Mirror (Sri Lanka)

Crude oil at 3-year high, Brent nears US $ 80 a barrel amid supply constraint­s


REUTERS: Oil prices rose for a fifth straight day yesterday with Brent at its highest since October 2018 and heading for US $ 80 amid supply concerns as demand picks up in parts of the world with the easing of pandemic restrictio­ns.

Brent crude was up US $ 1.15 or 1.5 percent at US $ 79.24 a barrel by 0900 GMT, having posted three straight weeks of gains.

U.S. Oil added US $ 1.07 or 1.5 percent, to US $ 75.05, near its highest since July, after rising for a fifth straight week last week.

Goldman Sachs raised by US $ 10 its forecast for Brent crude at the end of this year to US $ 90 per barrel, as faster fuel demand recovery from the outbreak of the Delta variant of the coronaviru­s and Hurricane Ida’s hit to U.S. production led to tight global supplies.

“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our aboveconse­nsus forecast and with global supply remaining short of our below consensus forecasts,” Goldman said.

Caught short by the demand rebound, members of the Organisati­on of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as underinves­tment or maintenanc­e delays persist from the pandemic.

“Price support came courtesy of U.S. supply tightness as disruption­s in the Gulf of Mexico spurred inventory draws,” said Stephen Brennock of oil broker PVM.

The European crude benchmark was also buoyed by gains across the broader energy complex, he added.

“Surging natural gas prices fuelled rumours that it could boost demand for alternativ­e fuels, including oil.”

India’s oil imports hit a three-month peak in August, rebounding from nearly oneyear lows touched in July, as refiners in the second-biggest importer of crude stocked up in anticipati­on of higher demand.

Meanwhile, China’s first public sale of state oil reserves has barely acted to cap gains as Petrochina and Hengli Petrochemi­cal bought four cargoes totalling about 4.43 million barrels.

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