Brent crude oil futures stuck near three-year highs on Tuesday, with U.S. benchmark crude close to 2014 peaks.
This is coming after the OPEC+ supplier group decided to stick to a gradual output increase plan rather than fully opening the taps.
Brent crude was up 51 cents or 0.6 per cent at $81.77 a barrel by 0845 GMT, having risen 2.5 per cent on Monday.
U.S. West Texas Intermediate (WTI) oil rose 50 cents or 0.6 per cent to $80.98, after gaining 2.3 per cent the previous session.
Oil prices have already surged more than 50 per cent this year, a rise that has added to inflationary pressures that crude-consuming nations such as the U.S. and India are concerned will derail recovery from the pandemic.
Despite the pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before the vote.
Russian Deputy Prime Minister, Alexander Novak, said after the talks he believed the market is now balanced.
“$80+ Brent price might feel toppy, and the move up yesterday might look exaggerated,’’ PVM analysts said, pointing to falling stock markets and shrinking supply deficits.
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“But prices are only seen uncomfortably high until the first cold spell arrives in the northern hemisphere creating additional demand and triggering a fresh bout of buying.’’
Meanwhile U.S. crude oil and distillate inventories are likely to have fallen last week, according to a preliminary Reuters’ poll.
Five analysts surveyed by Reuters estimated on average that crude inventories declined by about 300,000 barrels in the week to Oct. 1. (Reuters/NAN)
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