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Highlights
- Fuel shortage has been acting as a catalyst for spike in crude oil prices.
- The crude oil futures are trading at their highest level in three
- The crude oil shortage has pushed the crude prices by 27% in one and half months
The prices of crude oil in the international markets have surged by a whopping 27% in the past one and a half months as the world continues to face the energy crunch.
The December 2021 Futures of benchmark crude were trading at US$83 a barrel, up 27% from US$65.18 a barrel it traded on 20 August 2021.
Similarly, the prices of November 2021 futures of Western Texas Intermediate (WTI) have also surged by 23.93% to US$79.30 in the same period.
With this surge, the prices of crude oil are at their highest level in last three years. The last time the prices of crude oil were at this level was way back in October 2018.
The sustained rally in the crude oil prices amid an energy crunch comes at a time when many experts in the world were discounting the importance of the crude oil due to increased thrust on renewable sources of energy. The OPEC+ cartel – led by the Saudi Arabia and Russia – opted to continue with a gradual approach to production increases, even as a gas shortage in Europe and Asia, boosting demand for crude for power generation, has added to the price rally. The recent move by the alliance has triggered a surge in crude prices.
The move comes despite the fact that the Organization of the Petroleum Exporting Countries, Russia and their allies – collectively known as OPEC+ -- have faced increasing calls from some of its big consumers, such as the US and India, for extra supplies after oil prices surged more than 50% this year.
It "reconfirmed the production adjustment plan", the OPEC+ said in a statement issued after online ministerial talks, with reference to a previously agreed deal under which 400,000 barrels per day (bpd) would be added to supply by November.
