Crude Oil Futures Hit Three-Year High
October 18, 2021
The Baker Hughes Rig Count was up 12 crude oil rigs to a total of 445 and last year at this time there were 205 oil rigs in operation.
Crude oil futures hit fresh three-year highs on Friday. Brent crude oil traded above $85 per barrel and WTI traded back above $82 per barrel. The outlook for supply deficits has been helped by the easing of Covid restriction spurring demand and fuel switching to oil from high-priced natural gas and coal.
There are several commentaries out today that say there are three things that could slow this current rally. One is an unexpected increase to production from OPEC+, the next is about of warm weather showing up in the northern hemisphere, and the other is a release of oil from the Strategic Petroleum Reserve.
These high energy prices are causing more problems for the global supply chain. The IEA warned that high oil and natural gas prices could hinder worldwide industrial activity. There are also a lot of comments out over the weekend that the global supply chain backlog is getting worse. This will have an impact on transportations costs and lead to higher prices for goods. The other piece of advice many are mentioning is to get your Christmas shopping done early because of this situation.