Oil prices continued their record run-up on Wednesday on the back of supply shortfalls of fossil fuels and OPEC+ move to keep the output unchanged while signs of low demand in US capped the upward price movements.
International benchmark Brent crude was trading at $83.25 per barrel at 06.58 GMT for a 0.65% increase after closing Tuesday at $82.71 a barrel. It was its highest level since October 2018.
American benchmark West Texas Intermediate (WTI) rose to its seven-year-high level and traded at $79.59 a barrel at the same time for a 0.83% rise after ending the previous session at $78.93 per barrel.
The record price increases came after the world’s largest oil producers failed to respond to low supply crisis of the global economies which recovered from demand damages due to COVID-19 pandemic.
The crisis started when record high gas prices, which have risen 300% due to supply shortages and low production of other fuels forced producers in all sectors to seek alternative energy sources including coal and oil.
Expected to ramp up its production in line with rising demand for crude oil, the 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, chose to keep its output unchanged.
During their ministerial meeting on Monday where it discussed how much barrel they would put in the market, OPEC+ reaffirmed its previous deal and raised output by 400,000 barrels per day (bpd) in November.
Some OPEC countries including Nigeria and Angola are, however, experiencing difficulties even meeting their monthly quotas due to underinvestment and ongoing technical problems caused by disruptions during pandemic.
Meanwhile, the American Petroleum Institute (API) announced its estimate of a rise of over 951,000 barrels in US crude oil inventories relative to the market expectation of an decrease of 300,000 barrels.
The forecast inventory rise signals falling crude demand in the US, the world's largest oil consumer.
By Sibel Morrow