September 24, 2021

Will Oil Prices Break The Highest Level In 3 Years?

 Oil prices continued to maintain upward momentum with the movement of Brent oil prices now heading to a three -year high, supported by reduced supply amid rising market sentiment.

Brent crude futures traded at a two -month high of $ 77.30 a barrel in the Asian session, while US WTI climbed to a one -month high of $ 73.30 a barrel.

U.S. crude oil inventories fell to a nearly three -year low after two hurricanes hit the Gulf of Mexico causing damage to production facilities, according to data released by the Energy Information Administration (EIA) earlier in the week.

This was also driven by strengthening fuel demand, with the rate of plant capacity utilization on the US East Coast reported to have increased by up to 93%, the highest since May 2019.

In addition, several OPEC member states and its ally, OPEC+ are struggling to increase production after years of lack of investment and delays in maintenance work following the coronavirus outbreak.

Meanwhile, the strengthening of prices was also supported by the expected increase in natural gas prices following increased demand for oil products in energy generation in the winter.