 "Crude oil, Brent Crude")
By Sonali Paul and Florence Tan
MELBOURNE (Reuters) -Oil prices climbed on Friday, heading for gains of more than 3% for the week, on increasing signs of robust demand and tighter supplies over the next few months as rocketing gas and coal prices stoke a switch to oil products.
Brent crude futures touched their highest since October 2018, rising 84 cents, or 1%, to $84.84 a barrel by 0652 GMT. Front-month prices are set to climb for the sixth straight week, up 3% this week.
U.S. West Texas Intermediate (WTI) crude futures rose 74 cents, or 0.9%, to $82.05 a barrel, adding to an 87 cent jump on Thursday. The contract is heading for a 3.4% gain on the week, up for the eighth consecutive week.
Analysts pointed to a sharp drop in OECD oil stockpiles to their lowest level since 2015. Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost coming from industry turning away from expensive gas and coal to fuel oil and diesel for power.
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"The fact that Asian markets are content to chase prices higher at weekly highs, instead of lurking on price dips, is a strong signal that energy demand remains robust," OANDA senior analyst Jeffrey Halley said in a note.
The International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd).
That would result in a supply gap of around 700,000 bpd through the end of this year, until the Organization of the Petroleum Countries and allies, together called OPEC+, add more supply, as planned in January.
"This energy crisis, particularly in coal and gas, has really pushed up the energy complex higher and oil has benefited as a result," said Commonwealth Bank commodities analyst Vivek Dhar.
"You're looking at a narrow window where things can tighten considerably, but it's going to be very weather-dependent," Dhar said.
RBC Capital Markets analysts said the global oil market is shaping up for a strong bull cycle, led by supply tightening and demand strengthening at the same time.
"We maintain the view that we have held all year - that the oil market remains in the early days of a multi-year, structurally strong cycle," RBC analyst Michael Tran said in a note.
Investors shrugged off a higher than expected gain in U.S. crude stocks last week as refinery crude runs fell.
Crude inventories rose by 6.1 million barrels in the week to Oct. 8 to 427 million barrels, compared with analysts' expectations in a Reuters poll for a 702,000-barrel rise, the Energy Information Administration said on Thursday.
(Reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Editing by Kenneth Maxwell, Gerry Doyle and Jan Harvey)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
