The price of US crude oil hit a fresh seven-year high on Monday on fears that fuel demand was recovering faster from last year’s economic slowdown than producers could bring supply to the market.
West Texas Intermediate, the US crude benchmark, hit a high of more than $82 a barrel, its highest level since 2014, before pulling back to $80.46, up 1.4 per cent for the day.
Oil prices have climbed more than 16 per cent since the start of September, encouraged by a global economic rebound and a shortage of natural gas that has increased demand for other energy sources.
The rally hit a brief speed bump last week when Jennifer Granholm, US energ secretary, told the Financial Times that the Biden administration was considering tapping into the nation’s strategic stockpiles to help ease surging fuel prices.
American consumers are paying more for fuel at the pump than they have since2014, a political liability for an administration that has seen its .
“The market is gripped by fears — fear of stronger demand, fear of a rally contagion from gas and power, fear of missing out on the rally, and the fear to rule them all: supply anxiety,” said Roger Diwan, an oil analyst at consultancy
The price moves contributed to a mixed day for US and European stock markets.
The boost to energy stocks was initially enough to lift the entire S&P 500, overriding concerns about the effect of inflation and supply shortages on the wider market ahead of third-quarter earnings season. However, the blue-chip index fell back into the red as the oil price gave up some of its earlier gains, an