Oil has jumped to $85 U.S. a barrel for the first time since 2018 as a global energy crunch tightens crude supplies.
Brent futures in London trading rose as high as $85.10 U.S. a barrel, a gain of 1.3%. West Texas Intermediate crude oil for November delivery rose 0.8% to $81.95 U.S.
A shortage of gas and coal is triggering extra demand for oil products from the power market, especially in Asia, the International Energy Agency (IEA) said. The current energy squeeze has also led to an unusually large draw of crude oil stockpiles in the U.S.
Crude oil is set for its sixth straight week of gains as the energy crunch coincides with rebounding demand as major economies open after the pandemic.
Supply also remains curtailed, with Saudi Arabia’s energy minister reiterating the need for the Organization of the Petroleum Exporting Countries and its allies to take a gradual, phased approach to restoring output. China, meanwhile, has issued oil import quotas for 16 private refiners.
The U.S. is talking to OPEC+ members about energy supply, the State Department has said. U.S. natural gas prices have more than doubled this year, with the peak winter demand season still weeks away.
Crude stockpiles at Cushing, Oklahoma, dropped by almost two million barrels last week, according to the Energy Information Administration.
Inventories typically rise during this time of year as refineries conduct maintenance after the summer driving season. But the energy crisis is hitting inventories of key oil products such as diesel and gasoline, with global stockpiles dropping to their lowest level since 2014.
