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- Crude oil prices rose on Monday.
- The prices rose to record high levels on the back of robust demand and lower supplies due to cutbacks from producing nations.
- Power prices across the globe surged to record high levels in the past few weeks.
Crude oil prices on Monday rose to the highest levels in years, boosted by strong global energy demand amid skyrocketing prices for power, coal, and gas in leading economies of the world including China. December delivery Brent Crude oil futures last traded at US$83.31 per barrel down 0.37%, whereas November delivery WTI crude oil futures traded 0.40% down at US$80.20 per barrel as of 12 October 2021 at 11:48 AM AEDT.
The prices rose to record high levels on the back of robust demand and lower supplies due to cutbacks from producing nations and pressure from the government for transitioning to green energy.
The Organization of the Petroleum Exporting Countries along with its allies, together known as OPEC+ had decided to increase the output gradually by 400,000 bpd to phase out the current production cut of 5.8 million bpd.
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Power prices across the globe surged to record high levels in the past few weeks, primarily due to energy shortages in the US, Europe, and Asia. Additionally, the skying natural gas prices encouraged power plants to used crude oil instead of gas, amid higher gas prices.
Market Analysts believe that the gas-to-oil switch could boost the demand for crude oil from 250,000 to 750,000 bpd.
Apart from this, various states in India are experiencing electricity blackouts because of coal shortages. The Chinese government has ordered miners to ramp up coal production amid a spike in power prices.
Crude oil prices surged to multi-year high levels on the back of strong energy demand globally and tight supplies.
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