Investors are raising the price of oil and watching natural gas congestion flow into the crude market

The shortage of international energy supplies is pouring into crude markets and investors could see an increase in oil prices.

Although it ended Tuesday’s session, Brent crude, the world’s largest oil producer, is nearing a three-year high, trading at more than $ 80 a barrel earlier in the day. The increase in government-bond production will lead to a wider transition from stocks and commodities to more than 50% by 2021, closing 0.6% to 79.09.

US confidence fell 0.2% to $ 75.29 a day, but has recently risen.

Recent discoveries in oil prices have sparked widespread protests in the energy markets, depleting natural gas resources and reviving economic activity, leading to intense competition to feed their natural gas markets in Europe and Asia.

“Oil action is actually linked to the global energy crisis in the gas market,” said Julius Bayer, a Swiss private bank..

This lack of energy means that we are using oil to meet the demand, and this is now flowing into the oil market. In some power plants, when gas prices increase, oil can be used to generate electricity.

They have all played a role in reducing global natural gas production, depleting resources and reducing emissions from the Chinese government: converting coal to gas and raising gas prices. That comes as the Northern Hemisphere enters the warmer months. The supply crisis has already put many retailers in the UK out of business.

High gas prices in parts of the world have exacerbated the existing supply and demand balance. Losses in Mexico’s Gulf production last month reached more than 30 million barrels and could hit more than 55 million barrels before all production could return, said Andre Andre Martinson, senior oil market analyst at DNB Markets. .

Those changes have led analysts to raise oil prices. On Monday, Goldman Sachs raised Brent’s forecast for $ 20 to $ 90 by the end of 2021, citing Hurricane Damien Curvalin and “global gas shortages to increase fossil fuels.”

According to Claudio Gallimberti, senior vice president of Restad Energy, an electric consulting firm, power plants have started to convert from natural gas to Asian oil.

The Asian power plant currently consumes 900,000 barrels of oil per day and has 550,000 barrels of unused fuel, especially in Japan. Mr. Gallimberti says that in the next six months, the Asian energy sector expects oil demand to increase by 400,000 barrels per day, which means “the use of fossil fuels will increase.”

Futures for US natural gas rose by more than $ 6 at the beginning of the session by 2.4% on Tuesday by one million British units. This year it has risen to 130%.

European natural gas prices have more than quadrupled this year and the strike is likely to return soon, said Marx Spectron, head of basic research at brokerage firm George Slavov. Climate forecasts point to a cold November and December in Europe that will boost gas demand, Mr Slavov added.

Coal and carbon licenses have initially risen sharply, putting pressure on power-hungry companies and industries in Europe before large markets recouped profits.

The Organization of Petroleum Exporting Countries (OPEC) is a wild card in the oil price mix. They continue to close market barrels to raise enough prices for profit. But they have a history of releasing more supplies to the market to avoid high prices.

Oil prices are the highest in three years of global power shortages.


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Blake Ovard / The Hobbes Daily News: The Sun / Associated Press

OPEC, which released its long-term energy forecasts on Tuesday, is enjoying a sharp drop in oil prices during the pandemic. We will meet next week to discuss further product increases.

“OPEC is still consolidating its product [the market is] We are narrow but we are sure we will see very low prices next year, ”said Mr Raker.

Write David Hodry at David.Hodari@dowjones.com

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