Oil climbs on switch from gas and few signs of an easing supply crunch

SULAIMANI (ESTA) — Oil prices rose on Friday, tracking towards a 4.5% gain for the week on signs some industries have begun switching fuel from high-priced gas to oil and on doubts the U.S. government would release oil from its strategic reserves for now.

Brent crude futures jumped $1.16 to $83.11 a barrel at 0601 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.24 to $79.54 per barrel.

“A lot of catalysts are out there to keep the oil market tight,” Reuters cited Edward Moya, a senior market analyst at brokerage OANDA, as saying.

Moya pointed to signs of improved fuel demands as economic activity rebounds and coronavirus restrictions ease as well as fears that a cold winter will further strain gas supplies, according to Reuters.

Expectations are high “that nothing in the immediate future will change the significant supply/demand deficit that is in place”, said Moya.

Earlier in the week, WTI touched a near seven-year high of $79.78 while Brent hit a three-year high of $83.47.

“Oil prices lifted after the U.S Energy Department said it has no plan ‘at this time’ to tap into U.S. strategic oil reserves to cool the rally in oil prices,” Commonwealth Bank analyst Vivek Dhar said in a note.

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