Oil reaches multi-year high; OPEC+ proposes a plan for gradual output

Hitting $83 per barrel coupled with OPEC+’s refusal to take production up a notch to best concerns of tight global energy supply, oil had reached multi-level highs on Wednesday.

Gains were soon unwound due to a report released by the American Petroleum Institute (API) that shows a rise in crude inventories within the U.S. Also in the report, analysts postulate based on the technical indicators, that oil is rallying speedier than expected.

OPEC+ on Monday stood by their plan to increase output gradually without boosting it as opposed to what the U.S. and other nations are pushing.

The Brent crude saw a rise of $83.47, its highest since October 2018, but at 0813 GMT, it went down by 4 cents, bringing it to $82.52. The U.S. crude on the other hand rose to $79.78, its highest since November 2014; it later went down by 10 cents thus ending at $78.83.

Oil broker PVM, Stephen Brennock expressed his worries on an impending energy crisis in a statement:

“An energy crisis is unfolding with winter in the northern hemisphere still to begin, and sets the stage for even higher oil prices,”

This year, the price of Brent crude went up by 50%, instigating inflationary angst that could serve to weaken recovery from the pandemic. Natural gas has climbed to a record peak in Europe and coal prices that came from major exporters have also reached all-time highs.

Meanwhile, OANDA analyst, Jeffrey Haley went on record to say that both crude contracts appeared overbought, based on his findings from the RSI.

Slowing fuel demand on the other hand is seen through the downward pressure reflected through API’s data. The group stated that the U.S. crude inventories climbed by 951,000 barrels in the week to Oct. 1 alongside gasoline and distillate fuel inventories according to Oilprice.com.