Oil bolstered by US spending, as supply problems weigh heavily

Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma on March 24, 2016. REUTERS / Nick Oxford

NEW YORK, Nov. 8 (Reuters) – Oil prices rose on Monday as positive signs of global economic growth supported the outlook for energy demand and the United States said it was exploring options for doing so. in the face of high prices.

Brent crude rose 71 cents, or 0.83%, to $ 83.44 a barrel at 2:28 p.m. (6:28 p.m. GMT), after losing nearly 2% last week. US oil gained 68, or 0.84%, to $ 81.95 after falling 3% last week. Both contracts rose more than $ 1 a barrel in early trading.

US President Joe Biden on Saturday welcomed Congress’ passage of a long-delayed $ 1 trillion infrastructure bill that could boost economic growth and fuel demand. Read more

“Global demand is outstripping supply right now – the Build Back Better plan could make this situation worse – and the Biden administration can do little to meet that demand,” said Phil Flynn, senior analyst at Price. Futures Group in New York.

Further price support also came from a decision last week by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, a group known as OPEC +, not to step up. their expected production increases.

Biden had called on OPEC + to produce more crude to cool the market and said on Saturday his administration had “other tools” to deal with high oil prices. Read more

U.S. Energy Secretary Jennifer Granholm said on Monday that Washington was studying its options for dealing with high gasoline and heating prices in the United States, which some analysts said could involve the operation of the US strategic oil reserve.

“After Tuesday, no one wants to alienate voters,” said Kevin Book of Clearview Energy in Washington, referring to an election night in which Democrats recorded losses. This may make them wary of measures to curb climate change that could be costly, he said: “Talking about energy transition comes with the need to keep cars running and homes warm. “

Adding to bullish sentiment, China’s export growth slowed in October but exceeded expectations, supported by rising global demand ahead of the winter break and improving supply chains hit by coronaviruses. Read more

Saudi Arabia on Friday raised the price of its benchmark crude for Asian customers in December, beating market expectations. Read more

“Saudi Arabia also believes that the next few weeks will be tight. That is why its official selling price to Asia has been increased by $ 1.40 a barrel,” said Tamas Varga, analyst at PVM Oil Associates.

Global demand for jet fuel also appears poised to take off, as more governments facilitate air travel with reduced restrictions linked to the pandemic. Read more

Reporting by Julia Payne, Noah Browning and Aaron Sheldrick Editing by Mark Potter, David Goodman, Peter Graff

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