Oil Prices At Seven Year High After OPEC+ Announces Gradual Supply Increase

Oil prices in New York have jumped to their highest level since 2014 following a decision by OPEC+ to maintain a gradual supply increase.

West Texas Intermediate crude oil advanced $1.74 U.S. to settle at $77.62 U.S. a barrel, while Brent crude oil climbed $1.98 U.S. to settle at $81.26 U.S. a barrel.

The latest rally came after OPEC+ ministers ratified the 400,000 barrel-a-day output increase scheduled for November, according to a statement from the group. The decision comes as the world’s biggest oil company, Saudi Aramco, said the global natural-gas shortage has boosted crude consumption by 500,000 barrels per day.

The crude market has tightened significantly following the economic recovery from the pandemic and supply disruptions in the U.S. Gulf of Mexico due to seasonal storms. Surging natural gas prices have also raised the prospect of increased demand for oil products for power generation and are boosting inflationary pressures on the global economy.

Amid surging crude prices, the International Energy Agency said it expects to see oil prices soften in the coming months and a price decline will be "good news" for the global economic recovery.

Meanwhile, Royal Dutch Shell Plc resumed production at one of its main U.S. Gulf of Mexico offshore facilities, more than a month after Hurricane Ida brought production in the area to a halt. Service was restored at Shell’s 100,000 barrel-a-day Olympus oil and gas platform.

At the same time, the United Kingdom’s fuel crisis will still take at least a week to rectify, the main retailers’ group said, as the army set to work on delivering gasoline and diesel to filling stations.