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Oil benchmarks settle at highest since 2014 on short supply

CommoditiesOct 26, 2021 03:11PM 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 Scott DiSavino

NEW YORK (Reuters) -Oil prices edged up to their highest since 2014 on Tuesday, supported by a global supply shortage and strong demand in the United States, the world's biggest consumer.

The rally came ahead of U.S. inventory reports from the American Petroleum Institute (API), an industry group, on Tuesday and the U.S. Energy Information Administration on Wednesday.

Analysts expect the latest weekly U.S. oil inventory data to show a 1.9 million-barrel build in crude stocks. [EIA/S] [API/S] [ENERGYUSA] [ENERGYAPI]

Brent futures rose 41 cents, or 0.5%, to settle at $86.40 a barrel, while U.S. West Texas Intermediate (WTI) crude ended 89 cents, or 1.1%, higher at $84.65.

Those were the highest closes for both global benchmarks since October 2014.

"The energy crunch is still nowhere close to subsiding, so we expect prevailing strength in oil prices in November and December as supply lags demand and as OPEC+ stays on the sidelines," said Louise Dickson, senior oil markets analyst at Rystad Energy.

OPEC+, comprising of the Organization of the Petroleum Exporting Countries and allies like Russia, is currently raising production by 400,000 barrels per day (bpd) each month, but has pushed back against calls to boost output faster in response to the surge in prices.

"Crude prices continue to rise and pleas to OPEC to increase production continue to fall on deaf ears. The only thing that will get OPEC+ motivated is if private U.S. operators signal, they will increase production," said Edward Moya, senior market analysts at OANDA, noting "a jump to $90 oil seems likely."

Goldman Sachs (NYSE:GS) said Brent was likely to push above its year-end forecast of $90 a barrel, while Larry Fink, chief executive of the world's largest asset manager BlackRock (NYSE:BLK), said there was a high probability of oil reaching $100.

With oil and gas prices at multi-year highs, U.S. shale producers are poised to deliver the strongest earnings since the onset of the coronavirus pandemic, so long as they did not lock in sales tied to much lower prices.

While China's red-hot power and coal markets have cooled somewhat after government intervention, energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter.

Gasoline and distillate consumption in the United States is back in line with five-year averages after more than a year of depressed demand, and the market will be closely watching U.S. inventory levels.

U.S. President Joe Biden will discuss energy prices, the Iranian nuclear program and supply chain issues during his trip to Europe this week to attend a meeting of G20 leaders.

A 2.1 million-barrel cargo of Iranian condensate, the most recent delivery from a swap pact between the Middle Eastern nation and Venezuela, is expected to begin discharging on Wednesday at a PDVSA port.

Avtar Sandu, senior manager commodities at Phillip Futures in Singapore, said traders were awaiting clarity on the outcome of international talks on reviving Iran's 2015 nuclear agreement, after the United States said efforts were at "crucial phase" that could re-open the way for exports of Iranian crude.

(Additionl reporting by Aaron Sheldrick in Tokyo and Dmitry Zhdannikov in London; Editing by Marguerita Choy and David Evans)

Oil benchmarks settle at highest since 2014 on short supply
 

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Comments (14)
jj mm
jj mm Oct 26, 2021 4:24PM ET
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Oil is up because some countries want that and USA wants this as well.They can perfectly make prices go down but they don't want that
Buhari Jibrin
Buhari Jibrin Oct 26, 2021 12:51PM ET
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Hello
Buhari Jibrin
Buhari Jibrin Oct 26, 2021 12:50PM ET
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hello
lala khan
lala khan Oct 26, 2021 12:09PM ET
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very soon 100 to 120 $.
lala khan
lala khan Oct 26, 2021 12:09PM ET
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last some week inventory data is negetive for oil ,but oil go more & more high.data only for trep seller.this is only big gambler game
Jorge Rodriguez
Jorge Rodriguez Oct 26, 2021 10:36AM ET
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Now that oil is higher,The right thing to do is to reopen our domestic drilling.$$$$$
Trevor Roberts
LimitUp Oct 26, 2021 6:11AM ET
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The left is very happy, they have wanted high oil prices for a while to force you to catch lightning.
Temppp Ilok
Temppp Ilok Oct 26, 2021 2:34AM ET
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oh my god
Temppp Ilok
Temppp Ilok Oct 26, 2021 2:34AM ET
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oh my god
jullia jullia
jullia jullia Oct 26, 2021 2:22AM ET
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moh
jj mm
jj mm Oct 26, 2021 2:10AM ET
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ARAMCO. Arabian American company. why USA isn't pumping more oil??? Politics
Aleksandr Radchenko
Aleksandr Radchenko Oct 26, 2021 1:23AM ET
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Russia already has a 1-2 week lockdown due to the pandemic and the record number of deaths. all these millions of people will not buy gas to drive to work. oil demand will decline. the new variant of the "delta" virus will again close the economies of many countries within a month. I say hello to the fact that oil is waiting for $ 90. ahahaha.
Edward Chong
Edward Chong Oct 26, 2021 1:23AM ET
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i guess u better do morr reading.
Lars Hellman
LarsH Oct 26, 2021 1:23AM ET
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Mostly elderly in homes pass away not employed commuters
Steven king
Steven king Oct 26, 2021 12:51AM ET
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no!! but heck NO!! Nothing to do iran..
Aabis Ahmad
Aabis Ahmad Oct 25, 2021 11:26PM ET
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good
 
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