Original title: International crude oil prices have risen for the eighth week in a row, and the IEA issued a warning against a bad trend
On Friday (October 15), international oil prices rose, and this week's increase is expected to exceed 3%. As gas and coal prices soar, demand is strong and there are more signs of tight supply in the coming months as the price of gas and coal pushes people to switch to petroleum products.
At 16:45 Beijing time, NYMEX crude oil futures rose 0.93% to 82.07 US dollars/barrel; ICE Brent crude oil futures rose 1.01% to 84.85 US dollars/barrel. The two major contracts have been rising for eight consecutive weeks, with cumulative increases of 2.99% and 2.69% this week, respectively.
Analysts pointed out that oil inventories in the OECD (OECD) member countries fell sharply, reaching their lowest level since 2015. Demand has rebounded from its low during the pandemic, and the industrial sector's abandonment of natural gas and coal to fuel oil and diesel power generation has further stimulated demand.
OANDA senior analyst Jeffrey Halley said in a report: “The Asian market is content to chase the weekly high level rather than lurk when prices fall. This is a strong sign that energy demand is still strong.”
The International Energy Agency (IEA) said on Thursday (10/14) that energy shortages are expected to increase oil demand by 500,000 b/d. This will result in a supply gap of around 700,000 b/d by the end of this year until OPEC and its allies increase supply in January as planned.
The IEA said in its monthly oil report: “Record coal and gas prices and alternating power outages are driving the power sector and energy-intensive industries to turn to oil to keep lighting and plant operations running. But rising energy prices are also increasing inflationary pressure, which, combined with power outages, may lead to a decline in industrial activity and a slowdown in economic recovery.”
According to the IEA, the surge in demand last quarter led to the biggest drop in oil product inventories in eight years, while inventory levels in the OECD countries were at their lowest level since the beginning of 2015. He also emphasized: “The economic recovery is either too dependent on fossil fuels or is unsustainable. Global investment in renewable energy will need to triple by 2030 if the world wants to effectively tackle climate change.”
Vivek Dhar, commodity analyst at Commonwealth Bank of Australia, said, “This energy crisis, particularly in terms of coal and gas, has really boosted the overall price of energy, and oil has benefited as a result. We are now in a tight time window, and supply and demand may be significantly tightening, but this depends on weather conditions.”
RBCCapital Markets said that the global oil market is developing a strong bull cycle, dominated by tight supply and increased demand. The agency's analyst Michael Tran said in the report: “We maintain the view we have held throughout the year — the oil market is still in the early stages of a strong structural cycle that has continued for many years.”
The US Energy Information Administration said on Thursday that crude oil inventories increased by 6.088 million barrels in the week ending October 8, to 427 million barrels from October 8, compared to an increase of 1.05 million barrels previously expected. However, due to the decline in crude oil supply from refineries, investors were dismissive of the higher-than-expected increase in US crude oil inventories last week.