Views: 0 Author: Site Editor Publish Time: 2021-10-28 Origin: Site
There is concern as oil prices have been increasing, with one barrel of Brent crude, the international benchmark, rising to as much as 80.69 dollars last month. That was the first time it had passed the 80 dollar mark since October of 2018.
Demand fell and prices fell during the coronavirus lockdown, but now that the world economy is getting back to normal the demand is rising and supply cannot keep up.
What has caused the surge in oil prices in October 2021?
There are various factors behind the current rise in the price of oil. Here comes a list of several of the main reasons:
● Economies around the world are back up and running and looking to make up for lost time, thereby increasing demand.
● Hurricanes Ida and Nicholas damaged US oil infrastructure in the Gulf of Mexico.
● Coal shortages in Asia have seen countries on that continent use more oil than they used to.
● A surge in natural gas prices has increased demand for oil.
The natural gas price rise is a major factor in the parallel situation with oil. "Crude oil rallied to seven years high on strong fundamentals on higher demand with global power shortage and lower supply worries," explained Tapan Patel, a senior analyst for HDFC Securities. "Crude oil prices rallied on substitute demand from gas and coal consumers over rising prices. The recent surge in natural gas and coal prices globally has increased demand for crude oil to meet power demand. Crude oil prices are expected to trade up with resistance at $83 and support at $80 per barrel. MCX Crude oil October has support at 5,990, resistance at 6,180."
While some of the reasons for the current crisis are temporary, others are not and this has to be a concern for consumers. The inflation could keep continuing as economic trends around the world change.
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