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Highlights
- Crude oil is trading near multi-year high levels.
- OPEC+ agreed to adhere to their original plan to boost the output by 400,000 bpd per month.
- Higher coal and gasoline prices have additionally boosted oil prices.
Crude oil traded near multi-year highs on Friday. Brent Crude oil benchmark is currently trading near three-year highs while the US crude oil is playing near seven-year highs as OPEC and its allies decided to stick to their initial plan of gradually increasing the production and concerns from world leaders that the demand disruptions from COVID-19 are not yet over. December delivery Brent Crude oil futures last traded at US$85.18 per barrel up 0.64%, whereas December delivery WTI crude oil futures traded 0.92% up at US$84.53 per barrel as of 25 October 2021 at 12:49 PM AEDT.
The Organisation of the Petroleum Exporting Countries (OPEC) along with its allies together known as OPEC+ agreed during the beginning of the month to adhere to their original strategy to boost the output by 400,000 bpd per month till April 2022, phasing out the existing production cuts of 5.8 million bpd.
Price boost
Oil prices have been boosted by coal and gas shortages in China, Europe, and India, prompting the utilisation of crude in place of gas. The WTI crude got support from falling inventories at the U.S. storage hub in Cushing, Oklahoma.
OPEC | Source: © Gumpapa | Megapixl.com
The investors believe that the market is going to be undersupplied in near future due to strong demand and tight supplies as the economies are recovering from the lows of pandemics.
Bottom Line
Crude oil is trading near multi-year highs on the back of robust demand and tight supplies as OPEC+ decided to gradually increase the production.
