Meanwhile, OPEC brags about keeping control of the crude market: File Image/Pixabay
Following analytical predictions that U.S. oil inventories would be found to have climbed last week, reports on Thursday that stockpiles increased by a more than expected 6 million barrels caused oil prices to continue their upward trajectory - much to the consternation of experts who fear rising prices will compromise recovering world economies.
However, perhaps more tellingly in light of the impending global energy crunch, supplies at the nation's largest storage site at Cushing, Oklahoma declined by the most since June.
West Texas Intermediate on Thursday rose 87 cents to settle at $81.31 per barrel, while Brent advanced 82 cents to settle at $84 per barrel.
Prince Abdulaziz bin Salman, energy minister, Saudi Arabia
People need to copy and paste what OPEC has done
Prices were supported by the International Energy Agency stating that gas shortages in Europe and Asia are boosting demand for crude; UBS Group and Citigroup Inc. have accordingly raised their oil price forecasts because of gas-to-oil switching.
Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors, remarked, "The market is in a severe backwardation right now, so there's really no incentive to store crude oil."
While much of the focus on the energy crunch has been on the impending winter, Damien Courvalin, senior commodity strategist at Goldman Sachs, warned media that, "This is not a transient winter shock like it could be for gas: this is actually the beginning of a material repricing higher for oil."
He went on to point out that the oil market is in "the longest deficit we've seen in decades," and lack of upstream investment in oil supply while demand grows could mean "sustained high prices" at least in the year ahead.
Courvalin also burst the energy transition bubble by stating that the move to cleaner energy will take a long time, and calls to halt hydrocarbon supply investment will only cause "much higher energy prices in the coming years."
As for commodity traffic patterns, Per Heilmann, head of freight trading at Maersk Tankers, reported that in the past 25 days there's been a notable increase in shipments from Europe and the wider Atlantic Basin to the East: "We see an open price arbitrage from Rotterdam and Singapore on fuel oil markets."
Meanwhile, Prince Abdulaziz bin Salman, energy minister of Saudi Arabia, on Thursday said
the Organization of the Petroleum Exporting Countries (OPEC) should maintain gradual production increases despite calls to move faster.
He remarked, "We have done a remarkable job: gas markets, coal markets, other sources of energy need a regulator, [and] this situation is telling us that people need to copy and paste what OPEC has done."