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Oil breaches $80 mark as hike in gas price lifts oil demand

Oil change Chaging oil Petrochemical Power Generation

Gas demand in Europe and Asia, particularly from China, has remained heightened this year due to adverse weather and also as economies emerge from lockdowns.

ISLAMABAD: Crude oil prices went up on Monday by around one-and-a-half percent, as high natural gas prices are increasingly impacting crude oil, with consumers looking for cheaper fuels to substitute.

At 1315 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.28 (+1.55 percent) to reach $83.67 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $80.81 a barrel, up by $1.46 (+1.84 percent).

The price for Opec Basket was recorded at $78.60 a barrel with a 2.54 percent decrease, Arab Light was available at $81.83 a barrel with a 0.74 percent increase, while the price of Russian Sokol jumped to $82.69 after gaining 0.53 percent.

According to experts, Oil prices have vaulted to multi-year highs after OPEC and other major producers opted last week against increasing output by more than previously agreed.

However, it’s the natural gas trajectory that has been hogging the limelight after gas prices surged more than 300% to trade at its highest levels since 2014, outpacing oil and many other commodities.

With the global energy market remaining on fire, natural gas prices are increasingly impacting crude oil as well, with consumers looking for cheaper fuels to substitute.

Indeed, a major anomaly has now emerged: Power producers are doing an about-face by switching from costly natural gas to oil, a reversal from the decade-long trend of transitioning from costly oil to cheaper and cleaner natural gas.

Gas demand in Europe and Asia, particularly from China, has remained heightened this year due to adverse weather and also as economies emerge from lockdowns.

Natural gas markets have lately been energized by expectations of rebounding demand in the looming northern hemisphere winter as insufficient levels of inventories ahead of the winter season have been driving a spike in natural gas prices.

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