UK markets close in 6 hours 12 minutes
  • FTSE 100

    7,200.16
    -22.94 (-0.32%)
     
  • FTSE 250

    22,984.44
    +17.77 (+0.08%)
     
  • AIM

    1,237.96
    -0.13 (-0.01%)
     
  • GBP/EUR

    1.1854
    -0.0009 (-0.08%)
     
  • GBP/USD

    1.3801
    -0.0025 (-0.18%)
     
  • BTC-GBP

    48,097.24
    +1,374.07 (+2.94%)
     
  • CMC Crypto 200

    1,560.90
    +80.09 (+5.41%)
     
  • S&P 500

    4,536.19
    +16.56 (+0.37%)
     
  • DOW

    35,609.34
    +152.03 (+0.43%)
     
  • CRUDE OIL

    82.86
    -0.56 (-0.67%)
     
  • GOLD FUTURES

    1,785.90
    +1.00 (+0.06%)
     
  • NIKKEI 225

    28,708.58
    -546.97 (-1.87%)
     
  • HANG SENG

    26,017.53
    -118.49 (-0.45%)
     
  • DAX

    15,499.85
    -23.07 (-0.15%)
     
  • CAC 40

    6,680.70
    -24.91 (-0.37%)
     

Brent Rises to Highest Since 2018 on Global Energy Crunch

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
Brent Rises to Highest Since 2018 on Global Energy Crunch
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- Brent closed at the highest in nearly three years amid signs the crude market is rapidly tightening from a global energy crunch.

Most Read from Bloomberg

The global benchmark crude surged 1.8% on Monday, but met some resistance as it neared the key, psychological $80-a-barrel level. Its U.S. counterpart rose 2% to close above $75 a barrel for the first time since July. Both benchmarks are set to continue climbing as supply struggles to catch up with fast-rising demand, according to Trafigura Group’s co-head of oil trading Ben Luckock. His remarks came as Goldman Sachs Group Inc. said Brent could hit $90 by year-end as the market is in a bigger deficit than many realize.

Brent failed to break $80 because some speculators were taking profits, said Bob Yawger, director of the futures division at Mizuho Securities. “We should look for the market to reload and give the $80 level another shot in coming days.”

Crude is rallying on signs that inventories globally are falling sharply, with demand heating up ahead of winter and OPEC+ only slowly adding barrels back to the market. As traders eye the prospect of large market deficits, Trafigura said longer-dated oil prices remain cheap at around $70 a barrel. So-called timespreads, which gauge market strength, have rallied sharply in recent weeks in another sign that traders are positive about the outlook.

“Observable inventory draws are the largest on record,” Goldman Sachs analysts including Damien Courvalin wrote in a note to clients. “This deficit will not be reversed in coming months, in our view, as its scale will overwhelm both the willingness and ability of OPEC+ to ramp up.”

WTI’s front-month contract traded at the biggest premium to its second-month in nearly two months.

Meanwhile, OPEC+ is scheduled to meet on Oct. 4. to review its output policy. Internal documents from the group have already highlighted the risk of the natural gas crisis ramping up demand. World oil consumption could be boosted by an additional 370,000 barrels a day -- roughly 6% of expected growth -- if gas prices stay high for an extended period, according to the group.

U.S. natural gas futures rose for a third straight session on Monday as inventory levels stayed low ahead of the heating season.

Most Read from Bloomberg Businessweek

©2021 Bloomberg L.P.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting