Oil trades near $80 as global power crisis to boost demand

West Texas Intermediate futures climbed 0.7% in New York after topping key price levels on Friday for the first time since November 2014. From Asia to Europe, prices of heating fuels such as coal and natural gas are rising as the stockpile is running low. The winter season prompts people to switch to products like diesel and kerosene.

Read: In a world fighting climate change, fossil fuels take revenge

Crude has risen by over 60% this year as the roll-out of Covid-19 vaccines curbed movement and, subsequently, drove off demand for oil. While the Organization of the Petroleum Exporting Countries and its allies have promised to return more supplies to the market, increased consumption of transportation and heating fuels is likely to increase during the upcoming winter months.

Saudi Aramco estimates the gas crisis has already increased oil demand by about 500,000 barrels per day, while Goldman Sachs Group Inc. sees consumption climbing even higher. Concerns grew after the US Department of Energy said there are no plans “at this time” to tap the country’s oil reserves.

Read: Global natural-gas crisis is driving up oil demand, Aramco says

The coming weeks will be crucial for Iran’s nuclear program, German Chancellor Angela Merkel said, urging Tehran to return to the negotiating table as stalled talks with world powers hang in the balance. A quick solution to the impasse is unlikely after the last round of talks in June ended inconclusively, with no date set for the next one, keeping millions of barrels away from most international buyers.

Meanwhile, economists at Goldman cut their forecasts for US growth this year and next, blaming the delayed recovery in consumer spending. The bank said in a report that it now expects growth of 5.6% on an annualized basis in 2021, down from their previous estimate of 5.7% and 4% next year, down from 4.4%.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.