- Crude oil rises on Monday.
- Brent crude hovered near US$80 per barrel.
- Fast recovery from the pandemic has increased global demand.
Crude oil prices galloped on Monday with Brent crude hitting near US$80 per barrel on the back of robust demand and tight supplies. December delivery Brent Crude oil futures last traded at US$78.50 per barrel down 0.14%, whereas November delivery WTI crude oil futures traded 0.19% down at US$75.21 per barrel as of 28 September 2021 at 10:32 AM AEST.
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Fast recovery from the pandemic has increased the global demand rapidly putting pressure on the supply side. Supply disruptions from the US Gulf Coast have additionally created market deficits and weighted oil prices.
Crude oil’s robust recovery
A significant rise in crude oil prices has been witnessed as the oil companies in the US struggled to fully restore deliveries to the eastern seaboard after two deadly storms damaged oil facilities in the US Gulf Coast.
As per the Energy Information Administration (EIA) data, crude oil inventories tumbled to the lowest level in almost three years after a rapid rise in the drawdown followed by damages from two hurricanes.
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The prices were also buoyed due to the supply deficit of OPEC+ countries on under-investment and delay in maintenance work due to the pandemic-led restrictions. The members of OPEC+ curbed production in the last two years to remove the market glut during pandemics. However, the companies are now struggling to ramp up their output to meet the skyrocketing energy demands.
One of the leading market analysts, Goldman Sachs has raised its 2021 ending forecast for Brent crude by US$10 to land at US$90 per barrel. Global supplies have tightened due to soaring energy demands with ease in global lockdowns.
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Brent Crude oil prices hovered near US$80 per barrel on Monday amidst a strong demand due to solid recovery from pandemics and tight supplies.