Oil prices recorded huge gains during the week ending Oct. 8 due to an ongoing natural gas crisis which increased demand for crude oil while OPEC+ continues its strict supply policy.
International benchmark Brent crude traded at $82.55 at 1206 GMT on Friday, posting more than a 7.79% gain from Monday when trade at 0731 GMT registered at $78.77 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $78.89 at the same time on Friday, increasing over 4.71% relative to $75.34 a barrel on Monday.
All eyes were on the meeting of the Organization of Petroleum Exporting Countries and allies, known as OPEC+, on Monday as the global market players expect the group to intervene the ongoing low natural gas supply induced price hikes.
While demand for oil has increased as the world economies recovered from the wounds of the pandemic, it increased further after some producers started to switch from natural gas to relatively cheaper crude oil.
However, the OPEC+ group decided to keep its output scheme despite pressures from the US to increase its combined production.
The US had brought up the same request before the group’s meeting earlier in September in an effort to combat climbing gasoline prices, feeding concerns that rising inflation due to increasing energy costs could derail the economic recovery out of Covid pandemic.
Soon after the meeting, both benchmarks recorded massive increases and Brent hit a three-year-high level while WTI reached its highest level since November 2014.
An unexpected rise in the US crude oil stocks was not enough to cool down the heating oil prices, which was followed by the reports that the US was planning to sell crude from its strategic oil reserves.
The US Secretary of Energy Jennifer Granholm on Wednesday said the federal government has several tools to cool off rallying energy prices, including a potential release of oil from strategic petroleum reserves and an export ban. However, one day later, the US Energy Department said sales from Strategic Petroleum Reserves was not on the desk 'at this time'.
By Sibel Morrow