The price of Brent crude oil jumped Tuesday above $80 for the first time in almost three years on expectations for surging demand and concerns about supplies as the world slowly emerges from the pandemic crisis.
With the rollout of vaccines and easing of lockdowns this year, bets on demand for the black gold have surged, while an energy crunch in the northern hemisphere has sent natural gas prices to a seven-year high leading to a spillover into the oil market.
At the same time crude stockpiles have shrunk, while increases in output by OPEC and other major producers including Russia have been unable to temper the rally in the commodity.
Brent climbed 0.9 percent in morning Asian trade to $80.24, its highest level since October 2018. West Texas Intermediate gained 0.9 percent to $76.07.
"It looks like the oil rally has still got some legs," John Driscoll, at JTD Energy Services, said, adding: "I just don't see any evidence yet that the rally has topped out."
The advance comes even as the global economic recovery shows signs of slowing owing to supply chain issues and concerns about the Delta Covid variant that is leading to a spike in infections in several countries.
Prices have rocketed from the dark days of early last year, when lockdowns around the world hammered demand and saw the price of Brent sink to as low as $16 and WTI drop into negative territory.