International and domestic crude oil prices rose for the 5th straight week.
NYMEX Gasoline and heating oil futures also rose for the 4th straight week, tracking gains in the crude oil prices.
Prices rose this week as a global energy crunch boosted U.S. prices to their highest in almost seven years as big power users struggle to meet demand.
Additionally, even with worldwide demand growing as economic activity rebounds from pandemic lows, the OPEC and its allies this week said they would remain on the path of gradually bringing back production.
The OPEC and its allies said in a statement that they have reconfirmed the production adjustment plan, referring to a previously agreed deal under which 400,000 barrels per day (bpd) would be added in November.
Concern that demand for oil may weaken in the future was one of the reasons OPEC+ didn't add additional barrels and many believe that OPEC+ members aren't keen to derail the current oil price rally.
Meanwhile the U.S. government said it was monitoring energy markets, but it did not announce immediate action to lower prices, such as a release from strategic petroleum reserves, which further supported the oil market.
On the inventory side of things, U.S. crude oil and gasoline inventories rose last week as production rebounded as more offshore oil facilities returned from last month's storm-related shut-ins, data from the EIA showed.
Crude inventories rose by 2.3 million barrels in the week to Oct. 1 to 420.9 million barrels.
Output rose 200,000 barrels per day (bpd) to 11.3 million bpd in the most recent week.
In addition, product supplied by refineries, a proxy for fuel demand, was 20.7 million bpd over the past four weeks, roughly in line with pre-pandemic levels of demand.
U.S. gasoline stocks rose by 3.3 million barrels in the week to 225.1 million barrels, while, distillate stockpiles which include diesel and heating oil, fell by 396,000 barrels in the week to 129.3 million barrels.
The fundamental backdrop is one of tight supplies that is going to continue to push these prices steadily higher
As energy markets have tightened in the face of improved fuel demand, many fear that a cold winter could further strain natural gas supplies.
As other energy prices like natural gas and coal keep pushing higher, upside risks to the oil market have started to build.
Additionally, a Bloomberg new report showed that Chinese government officials have ordered the country's top state-owned energy companies to secure supplies for this winter at all costs.
Global supply chain bottlenecks are about to get even worse as China is set to bid more aggressively for what little coal and LNG supply there is, and this will continue to push prices higher.
Technically, Brent December contract has closed above the $80/barrel level for the first time in 3 years. The next resistance point is at $87.00 and a close above will push prices to $90.00. On the downside, $78.40 and $75.75 will act as important supports.
WTI Crude Oil November contract important resistance is at $81.40 and a close above will push prices to $87.00. On the downside, $77.05 and $75.15 will act as important supports.
Domestically, MCX Crude Oil continuous contract has closed near the 6000 level and the last time it closed near the level was in August 2014 where the close was 5831. 6000 could be breached and could test an important resistance at 6400 levels. On the downside, supports are at 5760 and 5620.
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