Oil prices rose on Monday, extending multiweek gains, amid supply restraint from major producers and growing demand for fuels as economies try to recover from the coronavirus pandemic.
Brent crude was up 81 cents, or 1%, at $83.20 a barrel by 0212 GMT, after gaining almost 4% last week. U.S. oil was up $1.15, or 1.5%, at $80.50 a barrel, the highest since late 2014. U.S. crude rose 4.6% through Friday.
Prices have risen as more vaccinated populations are brought out of lockdowns and fuel economic activity, with Brent advancing for five weeks and U.S. crude for seven.
Coal and gas prices have also been surging as economies recover, making oil more attractive as a fuel for power generation, pushing crude markets higher.
But with inventories in the U.S. starting to increase again after recent drawdowns, oil prices may start to falter.
“We think crude prices will struggle to climb much higher this quarter and still forecast them to gradually drop next year,” Caroline Bain, chief commodities economist at Capital Economics, said in a note.
U.S. crude inventories rose for a second straight reporting period last week as more production returned after extended shut-ins due to hurricanes. [EIA/S]
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, last week decided to maintain a steady and gradual increase in production.