Oil extends gains to multi-year highs on tight supply

An oil pumpjack and a tank with the corporate logo of state oil company PDVSA are seen in an oil facility in Lagunillas, Venezuela January 29, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Monday as global supply remained tight amid solid fuel demand in the United States and elsewhere in the world.

Brent crude futures rose 66 cents to $86.19 a barrel at 0540 GMT, following on from last Friday’s 1.1% gun.

U.S. West Texas Intermediate (WTI) crude futures increased 75 cents to $84.51 per barrel, after gaining 1.5% on Friday.

“With firm fuel demand in the United States amid tight supply, oil market’s tone stayed fairly strong, which prompted some speculators to unwind short positions,” Reuters quoted CEO of Emori Fund Management Inc Tetsu Emori as saying.

After more than a year of depressed fuel demand, gasoline and distillate consumption is back in line with five-year averages in the United States, the world’s largest fuel consumer.

Meanwhile, U.S. energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, energy services firm Baker Hughes Co said, according to Reuters.

Oil prices have also been bolstered by worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power.

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