Global oil prices hit a fresh seven-year high Monday after OPEC stuck to its previous plans for a small increase in production even as a rolling energy crisis in China continues to boost commodities in major markets around the world.
OPEC members, meeting virtually in Vienna, agreed to "reconfirm the production adjustment plan", a long-time pact that is taking some 1.5 million of barrels from the market each day, by just 400,000 barrels a day, a move that will do little to clam a year-to-date gain of around 50% for global crude prices.
"The current energy crunch in global coal and gas prices may boost oil demand by 500,000 barrels a day this winter due to substitution demand for diesel, propane and gas oil," said Saxo Bank's chief commodity strategist Ole Hansen.
WTI futures for November delivery traded $1.96 higher to start the week at $77.84 per barrel while Brent contracts for December, the global pricing benchmark, were up $2.16 at $81.46 per barrel, the highest since 2014.
Natural Gas prices were also on the move, with futures prices for October 26 delivery trading near the highest level in more than seven years at $5.96 per million British thermal units.
Tighter emissions standards and a reported lack of coal supplies have triggered factory shutdowns in China's industrial northeast, an ongoing surge in natural gas prices in Europe -- which are up more than 500% over the past year -- and historically low levels of U.S. crude inventory could both challenge the region's post-pandemic recovery and the Federal Reserve's 'transitory' stance on inflation risks.