Crude oil hits record high levels on skying demands

October 11, 2021 06:49 PM PDT | By Arpit Verma

Crude oil hits record high levels on skying demands — Image source: © Designer491 | Megapixl.com

Steady supply from OPEC+

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.

OPEC

Image Source: © Gumpapa | Megapixl.com

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.

Bottom Line

Crude oil prices surged to multi-year high levels on the back of strong energy demand globally and tight supplies.

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