Oil futures settled flat on Monday as prices fell sharply from the day’s high during the fag end of the session, with traders weighing global energy demand and supply positions.
Prices climbed higher early on in the session, and U.S. oil contract hit multi-year high, lifted by tight global supply and surging demand for oil in several countries across the world.
However, prices retreated later on in the session, and the most active crude futures contracts – West Texas Intermediate Crude for December – settled at $83.76 a barrel, Friday’s closing price.
WTI Futures hit a high of $85.41 a barrel, a near 7-year high, earlier in the day.
Brent Crude futures climbed to a near three-year high, but pared gains later on in the session.
While supply is tight, energy demand is on the rise following removal of coronavirus restrictions in several countries.
Oil also found support as the OPEC+ alliance sticks to an existing pact for a gradual increase in oil output.
Last week’s data from the U.S. Energy Information Administration (EIA) that showed a drop in crude oil inventories in the previous week, and inventories at the Cushing hub fell to their lowest level in three years continued to support crude prices.
Also, with several countries in Asia and Europe reportedly switching to diesel and fuel for power due to coal and gas shortages, the demand for oil has been rising of late.