Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Brent Oil Rises Above $85 as Saudi Arabia Vows Caution on Supply

CommoditiesOct 25, 2021 04:26
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

(Bloomberg) -- Oil advanced above $85 a barrel after Saudi Arabia said that the OPEC+ alliance should maintain its cautious approach to managing global crude supplies given the threat to demand still posed by the pandemic. 

Global benchmark Brent added 0.3%, building on a run of seven consecutive weekly gains, while West Texas Intermediate hit the highest since 2014. Saudi Arabia Energy Minister Prince Abdulaziz bin Salman told Bloomberg Television at the weekend that producers shouldn’t take the rise in prices for granted. That conservative stance was echoed by both Nigeria and Azerbaijan.

Oil has more than doubled over the past 12 months as the global economy rebounded from the dislocation caused by the coronavirus pandemic. While consumption has surged, the Organization of Petroleum Exporting Countries and its allies have been restrained in easing the draconian supply cuts they imposed in 2020 to salvage prices. That’s helped to propel Brent to the highest level since 2018 as stockpiles draw and key timespreads balloon.

The gains in crude have been supported by a powerful rally in natural gas, which has boosted demand for oil products as a substitute. While Prince Abdulaziz said that consumption may increase 500,000-600,000 barrels a day if the Northern Hemisphere’s winter is colder than normal and companies switch from gas to crude, he also cautioned that more barrels from OPEC+ would do little to curb costs of gas in Europe and Asia or gasoline in the U.S.

In a sign that the pandemic is far from vanquished, China has been dealing with a renewed Covid-19 outbreak caused by the delta variant from overseas. A wave of infections has spread to 11 provinces in the week from Oct. 17, Mi Feng, spokesman for the commission, told a briefing. 

At present, OPEC+ is raising daily production by 400,000 barrels each month, and has resisted pressure to do more. Tightness has been exacerbated by some members failing to reach their quotas. The cartel next meets on Nov. 4.

With stockpiles drawing, the market is firmly backwardated, a bullish pattern marked by near-term prices trading above those further out. The gap between Brent’s contract for this coming December and the same month in 2022, has swollen to $9.52 a barrel. The prompt spread between the nearest two contracts rose to 95 cents a barrel on Monday, up from 67 cents a week ago.  

©2021 Bloomberg L.P.

Brent Oil Rises Above $85 as Saudi Arabia Vows Caution on Supply
 

Related Articles

Energy & Precious Metals - Weekly Review and Outlook
Energy & Precious Metals - Weekly Review and Outlook By Investing.com - Dec 05, 2021

By Barani Krishnan Investing.com -- Is OPEC the Pied Piper of the oil market? Playing the we-aren’t-troubled-yet-by-Omicron tune, the oil cartel and its allies blew an air of...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email