© Reuters.
By Gina Lee
Investing.com – Oil was up Monday morning in Asia, continuing an upward trend as the week begins. U.S. crude hit a seven-year high, indicating a global supply that remains tight amid strong fuel demand as the economic recovery from COVID-19 continues.
Brent oil futures gained 0.76% to $85.28 by 12:33 AM ET (4:33 AM GMT) and WTI futures rose 0.94% to $84.55.
“Bullish sentiment continues to support oil prices as global supply remains tight at a time when demand is recovering from the pandemic,” Fujitomi Securities Co. Ltd. analyst Toshitaka Tazawa told Reuters.
“But immediate gains for WTI’s nearest-term contract may be limited given steepening backwardation,” Tazawa added.
WTI futures are currently in steep backwardation, with later-dated contracts trading at a lower price than the current contract.
Continuing coal and gas shortages in China, India, and Europe that drove fuel-switching to diesel and fuel oil for power, have also given the black liquid a boost.
Money managers raised their net long U.S. crude futures and options positions in the week to Oct. 19, the U.S. Commodity Futures Trading Commission said on Friday, in another sign of strong market sentiment.
Saudi Arabian crown prince Mohammed bin Salman said over the weekend that his country aims to reach ‘net zero’ emissions of greenhouse gases by 2060, a decade later than the U.S. The country’s Energy Minister, Prince Abdulaziz bin Salman, told Bloomberg over the weekend that producers should not take the rise in prices for granted. Saudi Arabia is the world’s top oil exporter.
Meanwhile, U.S. energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, according to Friday’s Baker Hughes Co. report.
Source: Investing.com
