Crude Oil Rise on China’s Energy Crisis

Crude oil prices have risen to their highest levels in seven years as domestic supply shortages in a number of pockets of the global energy market are intensified by investors seeking protection from “stagflation” by betting on prices that are still higher. Net speculative long positions in crude oil rose to an eight-week high, according to CFTC data released on Friday.

Oil prices rose more than 2 percent on Monday, extending gains in light of an energy crisis ravaging global economies, amid a recovery in economic activity and restrictions on supplies from major producers.

Brent crude rose $2.17, or 2.6 percent, to $84.56 a barrel by 1136 GMT, its highest since October 2018.

US crude rose $2.67, or 3.4 percent, to $82.02 a barrel, its highest since late 2014.

Prices are rising as more residents who received vaccinations leave the closure procedures, which supports economic activity, as Brent rose for five weeks and US crude increased for seven weeks.

Coal, gas, and electricity prices have soared to unprecedented levels in the past few weeks, driven by widespread energy shortages in Asia, Europe and the United States, making oil more attractive as a fuel for power generation.

While there was more bad news on the supply side over the weekend, floods hit a large part of China’s coal mines, hurting production at a chain of major mines.

Three major coal-producing provinces have pledged to increase production, Chinese news agency Caixin said.

Several provinces across the country have been suffering from blackouts since the middle of last month.

Demand for electricity is soaring as the country emerges from lockdowns.