Crude prices surge as skyrocketing gas rates up oil demand

Crude oil prices went up on Friday after remaining low for two days, mainly due to increasing oil demand amid skyrocketing natural gas prices. At 1240 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.58 (+0.71 percent) to reach $82.53 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $78.98 a barrel, up by $0.68 (+0.87 percent).

The price for Opec Basket was recorded at $80.65 a barrel with 0.27 percent increase, Arab Light was available at $81.23 a barrel with a 2.32 percent increase, while the price of Russian Sokol jumped to $82.25 after gaining 2.36 percent.

According to experts, the surge in gas prices and the extent of fuel switching from gas to oil will be the key factor to watch in the days to come. They said that an acceleration in gas-to-oil switching could boost crude oil demand used to generate power this winter, adding that the US distillate stocks, which include diesel and heating oil, are at their lowest heading into winter since 2000. They said that they have yet to hear of significant gas-to-oil switching in the European power sector. Overall, the week’s run-up has been spurred by soaring gas prices encouraging a switch to oil for power generation and by some industries, along with a decision by the Organisation of Petroleum Exporting Countries and allies led by Russia, together called OPEC+, to stick to plans to add only 400,000 barrels per day of supply in November.