SULAIMANI (ESTA) — Oil prices rose on Monday, hitting their highest level years, as demand recovers from the coronavirus pandemic, boosted by more custom from power generators turning away from expensive gas and coal to fuel oil and diesel.
Brent crude futures rose 90 cents to $85.76 a barrel by 0527 GMT, after hitting a session-high of $86.04, the highest price since October 2018.
U.S. West Texas Intermediate (WTI) crude futures climbed $1.21 to $83.49 per barrel, after hitting a session-high of $83.73, highest since October 2014.
“Easing restrictions around the world are likely to help the recovery in fuel consumption,” analysts from ANZ bank told Reuters.
They added that gas-to-oil switching for power generation alone could boost demand by as much as 450,000 barrels per day in the fourth quarter.
Cold temperatures in the northern hemisphere are also expected to worsen an oil supply deficit, Reuters cited senior analyst at OANDA Edward Moya as saying.
“The oil market deficit seems poised to get worse as the energy crunch will intensify as the weather in the north has already started to get colder,” he said.
“As coal, electricity, and natural gas shortages lead to additional demand for crude, it appears that won’t be accompanied by significantly extra barrels from OPEC+ or the U.S.,” he added
