Oil price surge: Fuel demand improves bringing relief for industry as prices skyrocket

Ukraine forces strike Russian-held Nova Kakhovka

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Brent crude futures climbed 46 cents (39 pence), or 0.5 percent, to $99.80 (£84.40) a barrel at 0051 GMT.

US West Texas Intermediate (WTI) crude futures also rose 48 cents (41 pence), or 0.5 percent, to $93.00 (£78.65) a barrel.

Both slumped about $2 (£1.69) on Thursday.

There has been uncertainty over the pace of rate hikes to tackle inflation, however, worries over a lack of oil demand have eased.

ANZ Research analysts admitted comments from some US central bank officials ahead of Chairman Jerome Powell’s speech on Friday had caused concern over the economic situation.

However they added: “Nevertheless, signs of strong demand are emerging.

“The most recent Congestion Index data from TomTom shows Asia Pacific, European and North American traffic levels all posting strong weekly growth in the week to August 24.”

Caution from Mr Powell as well as the prospect of Iranian crude coming back to the market has kept the price increase lower.

Tehran and Washington are currently in talks to revive the Iranian nuclear deal, with the European Union drafting the final offer.

The EU have said they expect a response soon although it is not yet clear how quickly oil exports from Iran would resume, according to Reuters.

If the sanctions are lifted it would take approximately 18 months for it to reach full capacity of four million barrels a day.

OPEC sources said this week that they would consider curbing output to offset the increase from Iran.

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It was Saudi Arabia that initially suggested introducing cuts to output.

Sanctions against Russian oil and gas have also led to an energy crisis in many parts of the world.

President Zelensky has suggested going even further and sanctioning Moscow’s nuclear industry.

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