As good indicators of global economic development bolstered the forecast for electricity consumption, oil prices increased on Monday, with the United States announcing that it was considering ways to deal with high costs. The price of Brent crude oil rose by 70 cents, or 0.9%, to $83.44 a barrel at 1255 GMT, following a decline of about 2% the previous week.
Oil prices in the United States climbed 80 cents, or 1%, to $82.07 per barrel, falling nearly 3% on Friday. President Joe Biden expressed his delight on Saturday at the approval of a long-awaited $1 trillion construction measure, which he believes would help to promote economic growth and consumption of energy.
The choice by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, not to accelerate their scheduled production levels last week helped to boost prices even further. Biden has called on OPEC to increase crude production to keep oil prices from rising, and he added on Saturday that his government had “other instruments” to cope with the growing price of oil.
The Strategic Petroleum Reserves Is Viable Option
The Energy Secretary of the United States, Jennifer Granholm, stated on Monday that the presidency was examining its options for dealing with high gas and energy costs in the United States, which some experts think might include accessing the country’s National Petroleum Reserves. “He wants to see increased supply from everyone, but he’s also going to look at other options that he may have, and he hopes to release a statement or two this week.” Said Granholm
Additionally, China’s trade growth slowed in October but was above expectations, supported by increased worldwide consumption ahead of the holiday shopping season and advances in distribution networks that had been affected by the coronavirus in September. Saudi Arabia boosted the price of its standard crude for consumers in Asia by a significant margin late on Friday, outpacing market predictions.
Moreover, “Saudi Arabia believes that the next few weeks will be difficult, which is why it has upped its formal sales price to Asia by $1.40 a barrel,” stated Tamas Varga, an expert at PVM Oil Associates. In addition, the world’s consumption of jet fuel appears to be increasing as more nations ease limitations on air travel due to the presence of the coronavirus.
Jet Fuel Demand
Jet fuel, which has lagged behind other fuels in recovering consumption to pre-pandemic levels, may ultimately catch up as more nations ease air travel. Experts say global jet fuel consumption is 15-20% under 2019 numbers, but improving immunization levels have boosted passenger trip reservations recently. “Vaccination rates are rising. So I cannot see why the demand for aviation won’t go up” -Jet fuel broker in Singapore stated.
“I believe airline companies would prefer to grab the year-end holiday traffic volume with their authorities’ approval. Nevertheless, arranging VTL (vaccinated travel lane) flights can be difficult,” he went on to say. As COVID rules are lifted, more Europeans are booking flights outside of Europe. Inoculated international air travelers from the 26 EU nations (France, Germany, Italy, Spain, Switzerland, Greece) and the UK and Ireland will be admitted beginning Nov. 8.