Oil Reaches Seven-Year High Amid Global Energy Shortages, According to Bloomberg

Oil prices continued to climb from a seven-year high following OPEC+’s decision to maintain its current supply agreement. This comes amid rising energy costs and growing concerns over the increased use of petroleum products for power generation.

On Tuesday, oil futures rose by 1.7%, nearing the psychologically significant $80-per-barrel mark. During an OPEC+ meeting on Monday, Saudi Arabia and its allies opted for a modest increase in production of 400,000 barrels per day for November. Additionally, U.S. gasoline prices reached a 12-year high due to global supply shortages, raising concerns about potential fuel shortages as winter approaches in the northern hemisphere.

Phil Flynn, a senior market analyst, stated that the current market situation leaves “no room for error,” cautioning that a cold winter could lead to a significant surge in prices.

The American Petroleum Institute, which is funded by the industry, reported a rise in U.S. crude stockpiles of 951,000 barrels last week, based on information from knowledgeable sources.

Both U.S. and global crude benchmarks have increased this month, contributing to fears of inflation as consumers are forced to pay more for essential items including gasoline, heating, food, and plastics. Analysts at Goldman Sachs forecast that demand for oil could increase by an additional 650,000 barrels per day this winter, driven by elevated natural gas prices.

Market indicators also suggest strengthening in the oil sector. The December-West Texas Intermediate crude spread, a common hedge fund trading strategy, surpassed $7.50 per barrel this week—its highest on a rolling basis since 2019.

In the U.S., Bloomberg analysts predict a rise in crude stockpiles of 700,000 barrels last week. The American Petroleum Institute is set to release detailed inventory data later today, with the U.S. government scheduled to publish its weekly report on Wednesday.