- Crude oil prices rose on Tuesday.
- The prices reached their highest level since 2014 due to global supply shortages and robust demand.
- The decision of OPEC+ to gradually ramp up the production has boosted the oil prices.
Crude oil prices rallied on Tuesday to reach their highest level since 2014 on the back of global supply shortage coupled with robust demand in the US, the world’s biggest consumer. December delivery Brent Crude oil futures last traded at US$85.47 per barrel up 0.04%, whereas December delivery WTI crude oil futures traded 0.27% down at US$84.42 per barrel as of 21 October 2021 at 11:56 AM AEDT.
The Organization of the Petroleum Exporting Countries (OPEC) along with its allies, combinedly known as OPEC+ agreed to increase the production by 400,000 bpd each month till April 2022 to balance the existing production cuts. The decision of OPEC+ to gradually ramp up the production has boosted the oil prices.
The oil rally came ahead of the inventory report from the American Petroleum Institute (API) and the U.S. Energy Information Administration on Wednesday.
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The shortage of gasoline and distillate in various parts of the world spurring the demand for fuel oil and diesel for power production, increasing oil prices.
The consumption of gasoline and distillate is back on the track followed by a year of low demand.
Crude oil prices surged to the highest level since 2014 on solid economic recovery, spurring high demand for fuels and tight supplies as OPEC+ decided to gradually increase the production.