AUS
NZ
UK
CA
USA
IND
Highlights
- Crude oil prices further rose on Monday.
- The prices have recorded significant gains during the last week.
- Oil’s rally is underpinned by soaring gas prices.
- OPEC+ decided to increase the output gradually.
Crude oil prices further rose on Monday after registering more than 4% weekly gain during the last week on high utilization of crude oil amid skyrocketing gas prices and on concerns that the US will be releasing oil from its strategic reserves. December delivery Brent Crude oil futures last traded at US$83.04 per barrel up 0.61%, whereas November delivery WTI crude oil futures traded 1.03% up at US$80.17 per barrel as of 11 October 2021 at 11:49 AM AEDT. WTI crude is hovering to the level last seen in 2014.
Oil prices have been lifted significantly after the US Energy Department stated that it has no plan to tap into the country's strategic reserves to cool the oil price rally.
Oil’s bull run
Source: Copyright © 2021 Kalkine Media
However, the oil rally in the last week is underpinned by soaring gas prices, encouraging the worldwide power sector to use oil in place of gas. The prices were additionally boosted by the decision of the Organization of Petroleum Exporting Countries and its allies, together known as OPEC+ to gradually increase the output and stick to its original plan to add 400,000bpd of supply in November.
Advancing winters in the northern hemisphere, coupled with higher gas prices are combinedly expected to increase the gas-to-oil switching and could boost the demand for crude oil.
Meanwhile, Russia is increasing its gas supplies to Europe in relation to the energy crisis in the region and to stabilize the market amid skying gas prices.
Bottom Line
Crude oil prices rose on Monday after recording significant gains in the last week due to increased gas-to-oil switching, amid skyrocketing gas prices.
