- WTI crude futures also set for a seventh straight weekly gain
- A weaker dollar on Friday is boosting appeal of commodities
U.S. crude futures topped $80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight.
Futures in New York rose as much as 2.3% on Friday and are poised for a seventh straight weekly gain, the longest stretch of advances since December. This week brought many indications that supplies will remain constrained: Saudi Aramco said the natural-gas crisis was already boosting oil demand and U.S. Energy Department said that it had no plans “at this time” to tap the nation’s oil reserves.
Saudi Arabia and its partners opted to only modestly increase output in November. Many analysts had expected OPEC+ to deliver a bigger hike as the surge in natural gas prices looks set to cause a further spike in oil demand this winter.
Meanwhile, the dollar weakened, also boosting the appeal of commodities priced in the currency.
U.S. crude futures are holding at the highest since 2014 after OPEC+ stuck with plans for a gradual boost in supply next month despite a rapidly tightening market, in part due to the energy crisis. The economic recovery from the pandemic along with a supply disruption in the U.S. Gulf of Mexico following Hurricane Ida had already tightened the market before rising natural gas prices spurred additional demand for oil products like diesel and fuel oil.
- West Texas Intermediate crude for November delivery climbed $1.71 to $80.01 a barrel at 10:17 a.m. in New York
- Brent for December settlement rose $1.37 to $83.32 a barrel
Meanwhile, China is still facing power outages and Beijing has ordered its state-owned firms to secure energy supplies for winter at all costs. Chinese fuel oil futures jumped almost 10% on Friday as local markets resumed after a week-long national holiday.
(By Julia Fanzeres)