Oil Climbs on Switch From Gas

Oil prices rose on Friday, tracking toward a 4.5% gain for the week on signs some industries have begun switching fuel from high-priced gas to oil and on doubts the US government would release oil from its strategic reserves for now.
“A lot of catalysts are out there to keep the oil market tight,” said Edward Moya, a market analyst at brokerage OANDA, pointing to signs of improved fuel demand as economic activity rebounds and coronavirus restrictions ease as well as fears that a cold winter will further strain gas supplies, Reuters reported.
Expectations are high “that nothing in the immediate future will change the significant supply/demand deficit that is in place”, said Moya.
Brent crude futures jumped 93 cents, or 1.1%, to $82.88 a barrel. US West Texas Intermediate crude futures climbed by $1.02, or 1.3%, to $79.32 a barrel.
Earlier in the week, WTI touched a near seven-year high of $79.78 while Brent hit a three-year high of $83.47.
“Oil prices lifted after the US Energy Department said it has no plan ‘at this time’ to tap into US strategic oil reserves to cool the rally in oil prices,” Commonwealth Bank analyst Vivek Dhar said.
Overall, the week’s runup has been spurred by soaring gas prices encouraging a switch to oil for power generation and by some industries, along with a decision by the Organization of Petroleum Exporting Countries and allies led by Russia, together called OPEC+, to stick to plans to add only 400,000 barrels per day of supply in November.
Analysts said the surge in gas prices and the extent of fuel switching from gas to oil would be the key factor to watch now.