Oil hits multi-year highs on supply deficit forecasts

October 17, 2021 06:25 PM PDT | By Arpit Verma

Oil hits multi-year highs on supply deficit forecasts — Image source: Rising oil prices | Source: © Emeraldgreen | Megapixl.com

Increasing oil demand

Oil for power generation | Source © Sofiaworld | Megapixl.com

The demand for crude oil has boosted with a solid recovery from the COVID-19 pandemic. The skyrocketing gas and coal prices have additionally boosted the demand for crude oil for its utilisation in power generation.

Adding to that, a sharp drop in the oil stocks in the US and member countries of the Organisation of Economic Co-operation and Development is expected to keep the global supplies tight.

The US has stated that it will lift the COVID-19 travel restriction from 8 November for fully vaccinated foreign travelers that will additionally boost the jet fuel demand.

The International Energy Agency (IEA) stated that the energy crunch is expected to boost oil demand by 500,000bpd, bringing the supply gap to nearly 700,000 bpd by the end of 2021.

Bottom Line

Crude oil prices reached multi-year high levels on the back of strong demand from various sectors after a solid comeback from the lows of the pandemic and strong demand for crude oil amid skyrocketing coal and gas prices.

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