The price of oil reached a three-year high of over $80 per barrel on September 28th. Goldman predicts that prices will continue to rise in the coming months, with Brent Crude trading at $80.69 on the same day.
Reasons For The Increase In Oil Prices
The energy crisis in Europe has contributed to higher demand for oil, as natural gas prices have increased. The easing of COVID-19 restrictions has also led to increased demand for oil, as countries increase production levels. Additionally, Hurricane season in the US caused production plants across the Gulf of Mexico to shut down, leading to increased demand in the US. Analysts at Goldman Sachs predict that oil prices could reach $90 per barrel over the winter season due to forecasts of a colder winter and increased demand in the travel sector.
India, the biggest importer of crude oil, has increased orders due to predictions of higher demand. Vitol, the world’s leading independent oil trader, predicts that demand will increase by 500,000 barrels daily over the winter period of 2021.
Impact On Traders
Increased oil prices will likely lead to higher prices for petrol and diesel, which are already at record highs. Current prices stand at £1.35 per litre for petrol and £1.36 for diesel. The RAC fuel spokesman, Simon Williams, commented that things are looking “pretty bleak” for UK drivers, adding, “We might yet see higher forecourt prices in the coming days, irrespective of the current supply problems.” Investors looking for short-term opportunities may consider crude oil or major petrol and diesel producers.