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Oil lifted by U.S. spending, as supply concerns weigh

CommoditiesNov 08, 2021 02:59PM ET
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© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices rose on Monday as positive signs for global economic growth supported the outlook for energy demand and the United States said it was weighing options to address high prices.

Brent crude was up 71 cents, or 0.83%, at $83.44 a barrel by 2:28 p.m. (1828 GMT), having lost nearly 2% last week. U.S. oil gained 68, or 0.84%, to $81.95 after a 3% fall last week. Both contracts rose by more than $1 a barrel in early trade.

U.S. President Joe Biden on Saturday welcomed congressional passage of a long-delayed $1 trillion infrastructure bill, which could boost economic growth and demand for fuel.

"Global demand is exceeding supply right now - the Build Back Better plan could exacerbate that situation - and there's little the Biden Administration can do to reply to meet that demand," said Phil Flynn, senior analyst at Price Futures Group in New York.

Further price support has also come from a decision last week by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group collectively known as OPEC+, not to speed up their planned production increases.

Biden had called on OPEC+ to produce more crude to cool the market and on Saturday said his administration had "other tools" to deal with high oil prices.

U.S. Energy Secretary Jennifer Granholm on Monday said that Washington was weighing its options to address high gasoline and heating prices in the United States, which some analysts say could involve tapping the U.S. Strategic Petroleum Reserve.

"After Tuesday, no one wants to alienate voters," said Kevin Book at Clearview Energy in Washington, referring to an election night in which Democrats saw losses. That may make them wary of pushing measures to curb climate change that could be expensive, he said: "Talk of the energy transition comes with a need to keep to keep cars running and houses warm."

Adding to bullish sentiment, China's export growth slowed in October but beat forecasts, buoyed by rising global demand ahead of the winter holiday season and improvements in coronavirus-hit supply chains.

Saudi Arabia on Friday raised the price of its benchmark crude for customers in Asia in December, exceeding market expectations.

"Saudi Arabia also reckons that the next few weeks will be tight. This is why its official selling price to Asia was increased by $1.40 a barrel," said Tamas Varga, analyst at PVM Oil Associates.

Global demand for jet fuel also looks set to take off as more governments make air travel easier with reduced pandemic-related restrictions.

Oil lifted by U.S. spending, as supply concerns weigh
 

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Comments (4)
Marthinus De Beer
CrystalEyelBall Nov 08, 2021 12:32PM ET
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Biden will lower Dollar value and pump more oil
Vlad Lozovskiy
Vlad Lozovskiy Nov 08, 2021 8:45AM ET
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Oil surges because senile old dude is planning to close another pipeline, and he says "it will not affect prices".  That pipeline carries 500 000 barrels of oil a day.
Bill Ackman
Bill Ackman Nov 07, 2021 10:16PM ET
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Why would Aramco give its oil for free xDDDD…Of course Aramco will try and sell it for as much as possible.Every Politician in America is grateful to Aramco that it sells its oil in only dollars and not gold otherwise dollar will be used as toilet paper already xDDD
jj mm
jj mm Nov 07, 2021 10:16PM ET
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ARAMCO...Arabian American companies? USA has nothing to do in this company? USA don't control the production in ARABIA? come on
Angus Malarkey
Angus Malarkey Nov 07, 2021 10:11PM ET
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Depleting the Strategic Petroleum Reserve because gas prices are a little bit higher than they've been is foolish. That oil will be needed later when shtf happens.
Daniel Hernandez
Daniel Hernandez Nov 07, 2021 10:11PM ET
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true why use SPR when oil is only 80-85 a barrel SPR should only be used in times of war or depression level economic conditions.
John Laurens
John Laurens Nov 07, 2021 10:11PM ET
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Daniel Hernandez  on the way if Biden and the fascist wokesters get their way.
 
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