THE Brent crude price hit a fresh three-year high yesterday amid the surge in demand fuelled by the global recovery from the economic impact of the pandemic.

Brent crude sold for $84.52 per barrel yesterday lunchtime, up $2.13 on the day, before easing to $83.86/bbl in afternoon trading.

The price has jumped by about 30 per cent, from around $65/bbl, since late August.

The price of West Texas Intermediate crude hit a seven-year high of more than $82/bbl yesterday.

Recent increases in the crude benchmarks reflect traders’ expectations that a strong global recovery is in prospect, as the rollout of coronavirus vaccines encourages governments around the world to lift restrictions on activity.

The Brent crude price fell below $20/bbl in April last year after lockdowns were imposed around the world. The price of WTI turned negative briefly amid fears storage capacity would be exhausted.

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The recent crude market buoyancy has been supported by the surge in gas prices, which has been powered by strong demand in Asia and geopolitical factors.

The Rystad Energy consultancy noted: “Asia, which is the prime candidate for increasing oil burning to produce electricity in the current environment, is also almost running out of coal.”

Rystad highlighted the importance of the decision by members of the Opec + grouping of major exporters to ease curbs on production agreed last year relatively slowly.

HeraldScotland: Bjarne Schieldrop is chief commodities analyst at SEB banking group Bjarne Schieldrop is chief commodities analyst at SEB banking group

Bjarne Schieldrop, at Nordic banking group SEB, said increases in oil prices may partly reflect the impact of cuts in investment made by firms in response to the fallout from the pandemic. He noted: “Spending and drilling will revive again but the typical dynamics are: first, the price goes up; second, drilling activity goes up; and third production follows up.”

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Gas prices hit record levels last week but eased slightly after Russia signalled it might increase supplies.