Crude oil prices near three-year highs on Tuesday, with United States benchmark crude close to 2014 peaks.
This is coming barely 24 hours after the Organization of Petroleum Exporting Countries plus, OPEC+ supplier group decided to stick to a gradual output increase plan rather than fully opening the taps.
Brent crude was up 51 cents or 0.6 per cent at $81.77 a barrel by 0845 GMT, having risen 2.5 per cent on Monday.
U.S. West Texas Intermediate (WTI) oil rose 50 cents or 0.6 per cent to $80.98, after gaining 2.3 per cent the previous session.
Oil prices have already surged more than 50 per cent this year, a rise that has added to inflationary pressures that crude-consuming nations such as the U.S. and India are concerned will derail recovery from the pandemic.
Despite the pressure to ramp up output, OPEC+ was concerned that a fourth global wave of COVID-19 infections could hit the demand recovery, a source told Reuters a little before the vote.
Russian Deputy Prime Minister, Alexander Novak, said after the talks he believed the market is now balanced.
“$80+ Brent price might feel toppy, and the move up yesterday might look exaggerated,’’ PVM analysts said, pointing to falling stock markets and shrinking supply deficits.
“But prices are only seen uncomfortably high until the first cold spell arrives in the northern hemisphere creating additional demand and triggering a fresh bout of buying.’’
Meanwhile U.S. crude oil and distillate inventories are likely to have fallen last week, according to a preliminary Reuters’ poll.
Five analysts surveyed by Reuters estimated on average that crude inventories declined by about 300,000 barrels in the week to Oct. 1.