Brent crude was higher $2.17, or 2.6%, at $84.56 per barrel by 1136 GMT, its highest after October 2018.
U.S. West Texas Intermediate (WTI) crude climbed $2.67, or 3.4%, to $82.02 for its highest after late 2014.
According to Commerzbank (DE: CBKG) analyst, Carsten Fritsch oil prices should climb in the short term.
Prices have increased as more vaccinated populations are brought out of COVID-19 lockdowns, holding a revival in economic activity, with Brent pushing for five weeks and U.S. crude for seven.
The speed of economic recovery coupled with cold weather has raised the energy demand. In opposition, government pressure to stimulate the transition to cleaner energy has reduced investment in oil projects to increase supplies.
World leaders should meet in November at the United Nations Climate Change Conference (COP26) in Glasgow to flesh out duties on energy transition.
In recent weeks, coal, gas, and electricity rates have also risen to record highs. They were pushed higher by widespread energy deficits in Asia, Europe, and the United States.
Electricity Blackouts Worldwide
In India, some states are undergoing electricity outages due to coal deficits. China’s government, meantime, has required miners to ramp up coal production as power prices rise.
According to UBS analyst Giovanni Staunovo, the news from last week is that the (U.S.) Department of Energy is not intending to tap into strategic reserves. For now, it is keeping the oil market tight and is boosting prices.
Last week, U.S. Energy Secretary Jennifer Granholm stated the administration contemplated tapping the country’s emergency oil reserves to reduce gasoline prices. Nevertheless, the Energy Department later announced it had no intentions to take action at this time.
Drillers in the United States scored five new oil wells last week for the fifth continuous weekly increase in oil and gas rigs. [RIG/U]
Last week, the Organization of the Petroleum Exporting Countries (OPEC) and partners, recognized as OPEC+, determined to keep production steady and gradual rise.
According to Tamas Varga, oil analyst at London brokerage PVM Oil Associates, depleting stocks, OPEC system, and the continuous energy crunch will present solid price support in the following three months.