Oil prices rose above $80 for the first time in three years on Tuesday during a global energy crunch.- Analysts said investors were betting the
natural gas shortage would drive up demand for oil. - Oil supply shortages, particularly in the US after
Hurricane Ida , were also adding to the squeeze.
$4, the benchmark global oil price, rose above $80 a barrel for the first time in three years on Tuesday, as supply shortages and a natural gas crunch rocked energy
The benchmark price rose as much as 1.7% to $80.75 a barrel before paring its gains slightly, according to Bloomberg prices. $4, the US benchmark, rose as high as $76.67 a barrel.
Brent crude has risen around 55% this year as economies have reopened and demand has bounced back rapidly, while the OPEC group of crude-exporting countries have kept prices buoyant by limiting supply.
Oil-price rises have picked up speed over the last few weeks, however. One reason is that $4 shut down much of the US's production capacity, limiting supply from a major market.
Another key reason, analysts said, is the ongoing energy crunch that has sent
Read more: $4
Goldman Sachs said this week it now expects Brent crude to hit $90 a barrel by the end of the year, compared to a forecast of $80 a barrel previously.
The bank said that the impact of Hurricane Ida that shuttered production capacity in the Gulf of Mexico and much of the shale basin has more than offset a recent increase in oil production from OPEC and its allies, known as OPEC+.
And it said: "Winter demand risks are further now squarely skewed to the upside as the global gas shortage will increase oil fired power generation."
Analysts said
Power outages $4, caused in part by an anti-pollution drive, are also set to increase oil demand, analysts said.
Louise Dickson, senior oil markets analyst at Rystad Energy, said: "The rise of oil prices is continuing beyond what even most bullish traders would dream just months ago."
Yet she added: "Upward space for price maneuvering could just as easily be extinguished, either as investors opt for profit-taking or, in the longer term, as a lethargic economic recovery brings commodity prices back down to a more humble perch."