Oil prices rose yesterday towards $84 a barrel, near the highest level in three years, supported by the recovery in global demand, which contributes to the shortage of energy in major economies such as China.
As demand grows as economies recover from the coronavirus pandemic, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the alliance known as OPEC+, are sticking to plans to gradually increase production rather than boost supply quickly.
Stephen Brennock of BP said: in a. “OPEC + will move forward with its cautious approach to supply in the end-of-year period.”
Brent crude rose two years to $83.67 a barrel and hit $84.60 yesterday, the highest level since October 2018, and US crude rose 29 cents, or 0.4%, to $80.81 a barrel.
The lack of a significant price change yesterday may be because the market appeared to be overbought based on short-term technical indicators such as the RSI, said Jeffrey Haley, an analyst at brokerage Oanda.
“I wouldn’t be surprised at all if we see a drop of between five and eight dollars a barrel at some point this week,” he said.
The price of Brent crude has risen more than 60% this year. In addition to the OPEC+ supply constraints, the rise was driven by a record rise in European gas prices, which encouraged a shift to oil for power generation.
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