Oil prices rose on Monday, extending gains from last week and reaching their highest levels in several years, as global supplies continued to be tight in light of strong demand for fuel in the United States and elsewhere in the world, coinciding with the recovery of economies from the recession caused by the Corona virus pandemic.

US West Texas Intermediate crude futures rose 0.7% to $84.38 a barrel by 06:46 GMT, after rising 1.5% last Friday.

And earlier in the session, it touched its highest level since October 2014 at $84.76.

Brent crude futures rose 0.7% to $86.09 a barrel, after last Friday's 1.1% gain.

The contract earlier reached its highest level since October 2018 at $86.43.

"With strong fuel demand in the United States amid tight supply, the trend in the oil market remains somewhat strong, which has prompted some speculators to abandon short positions," said Tetsuo Emori, CEO of Emori Fund Management.

After more than a year of lower demand for fuel, consumption of gasoline and distillates is back in line with 5-year averages in the United States, the world's largest consumer of fuel.


Meanwhile, US energy companies last week cut the number of oil and natural gas rigs for the first time in 7 weeks, even as oil prices rose, energy services firm Baker Hughes said.

Oil prices also rose on fears of coal and gas shortages in China, India and Europe, prompting a shift to diesel and fuel oil for power generation.

And on Thursday next week, the “OPEC +” alliance will hold a meeting to discuss developments in the global crude market, and to take a decision on easing the current production restrictions of 4.6 million barrels per day.

 World Bank forecast

The World Bank announced last Thursday that the significant rise in global oil prices may threaten global growth, and that these prices are unlikely to recede before 2023.

According to a World Bank report on commodity market outlook, crude prices are expected to record $70 per barrel at the end of the year, which is 70 percent higher than in 2020.

"Rising energy prices pose significant risks to global inflation in the near term. If it continues, it could affect growth in energy importing countries," said World Bank chief economist Ayhan Kose.

Average prices are expected to rise in 2022 to reach $74 before declining to $65 in 2023, according to the World Bank.