Oil drills are pictured in the Kern River oil field in Bakersfield, California November 9, 2014.
Oil prices rose for a fifth straight day on Monday with Brent at its highest since October 2018 and heading for $80 amid supply concerns as demand picks up in parts of the world with the easing of pandemic restrictions.
Brent crude was up $1.15 or 1.5% at $79.24 a barrel by 0900 GMT, having posted three straight weeks of gains. U.S. Oil added $1.07, or 1.5%, to $75.05, near its highest since July, after rising for a fifth straight week last week.
Goldman Sachs raised by $10 its forecast for Brent crude at the end of this year to $90 per barrel, as faster fuel demand recovery from the outbreak of the Delta variant of the coronavirus and Hurricane Ida's hit to U.S. production led to tight global supplies. read more
"While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts," Goldman said.
Caught short by the demand rebound, members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic.
"Price support came courtesy of U.S. supply tightness as disruptions in the Gulf of Mexico spurred inventory draws," said Stephen Brennock of oil broker PVM.
The European crude benchmark was also buoyed by gains across the broader energy complex, he added.
"Surging natural gas prices fuelled rumours that it could boost demand for alternative fuels, including oil."
India's oil imports hit a three-month peak in August, rebounding from nearly one-year lows touched in July, as refiners in the second-biggest importer of crude stocked up in anticipation of higher demand.
Meanwhile China's first public sale of state oil reserves has barely acted to cap gains as PetroChina and Hengli Petrochemical bought four cargoes totalling about 4.43 million barrels.
Source: Reuters / Additioanl reporting by Aaron Sheldrick; Editing by Kirsten Donovan and Louise Heavens
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