International oil prices hit a new high in the past seven years, a major dilemma in the northern hemisphere is getting worse

On Monday (October 11), international oil prices soared again, continuing the previous seven-week streak, because the energy crisis that plagued the major economies showed no signs of alleviation due to the recovery of economic activities and the limited supply of major producing countries .

GMT+8 15:21, NYMEX crude oil futures rose 1.94% to US$80.89/barrel; ICE Brent crude oil futures rose 1.58% to US$83.69/barrel. The two cities respectively refreshed their highs since October 31, 2014 to US$81.10/barrel and their highs since October 10, 2018 to US$83.88/barrel.


As more people who have been vaccinated get rid of the lockdown, economic recovery is gaining momentum, and coal and natural gas prices have soared, making oil more attractive as a fuel for power generation, driving the oil market higher. The two major crude oil markets have been rising for seven consecutive weeks.

Due to coal shortages, major Asian economies are experiencing power shortages. The Central Bank of India kept its policy interest rate unchanged last week, lowering its retail inflation forecast for the current fiscal year ending in March 2022 from 5.7% to 5.3%, but at the same time warned of the risks posed by rising fuel prices.

With the increase in heating demand, the energy crisis sweeping the world is exacerbating the predicament of wintering in the northern hemisphere. ING Economics said in a report: “Considering the expected demand boost due to the conversion of natural gas to oil, the market has shown interest in related demand adjustments.”

Kelvin Wong, a commodity analyst at CMC Markets in Singapore, said: "There is no new fundamental news that directly affects price trends in the day. Inter-market factors suggest that inflation expectations are further rising, which is supporting the bullish trend of oil prices."

The US Commodity Futures Trading Commission (CFTC) said on Friday (October 8) that as of the week of October 5, fund managers increased their net long positions in crude oil futures and options by 8,902 to 325,578.

The latest data from Baker Hughes of the United States shows that, taking advantage of rising prices, US oil and gas drillers added 5 new wells last week. This is the fifth consecutive week of increase in oil and gas drilling platforms.

The Organization of Petroleum Exporting Countries and its allies (OPEC+) decided last week to maintain the current policy of increasing production by 400,000 barrels per day per month. OPEC will release its monthly report later this week.

A person familiar with the matter said on Monday that Saudi Aramco has agreed to supply at least two North Asian buyers with additional crude oil in November, while meeting the full contract volume of the other three buyers. One of the sources said that the supply is expected to be fully sufficient this month.

Saudi Aramco will also reduce the price of crude oil sold to Asia for the second consecutive month in November, which shows that as OPEC+ gradually increases production before the end of the year, Saudi Arabia is eager to remain competitive.