Oil Prices Jump Past $80 for the First Time Since 2018
Just as energy prices sharply soar to record-highs across global markets, crude prices have jumped above $80 per barrel, in yet another sign that the world is headed for a major energy crisis ahead of the winter season.
Brent futures for November rose 0.83% to $80.19 per barrel Tuesday morning, while futures for December delivery were up 0.85% to $79.36 per barrel. November futures for US benchmark WTI also jumped on Tuesday, rising by 0.85% to $76.09 per barrel.
The latest jump in crude prices comes amid a strengthened outlook for global energy demand, as Opec now forecasts demand will surpass 2019 levels come 2023, and will continue increasing until 2035 before hitting its peak. “Energy and oil demand have picked up significantly in 2021, after the massive drop in 2020, and continued expansion is forecast for the longer term,” said Opec’s secretary-general Mohammed Barkind as part of the group’s annual oil outlook report.
The US, meanwhile, has seen its crude inventory levels deplete to below average for the seventh straight week even prior to the peak consumption period, threatening to create a global shortage as countries continue to lift Covid-19 travel restrictions.
According to Goldman Sachs, the current energy crisis will likely continue for a number of months, prompting the bank to forecast crude prices at $90 per barrel before the end of 2021. Goldman also warned that surging input costs, coupled with rising gas prices and slower growth, will likely have a negative impact on Europe’s corporate profit growth this year. “When growth slows, it becomes harder for companies to pass on higher input costs, which is the main risk for net income margins,” the bank said in a note seen by the Financial Times.
Information for this briefing was found via OPEC, the EIA, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.