Oil prices rose today to trade 4% up on the week, buoyed by a global energy crunch that has helped gas prices to record highs and prompted China to demand increased coal production.
Energy markets have tightened in the face of improved fuel demand as economic activity rebounds and coronavirus restrictions ease, with further pressure from fears that a cold winter could add to the strain on gas supplies.
China ordered miners in Inner Mongolia to ramp up coal production today to help alleviate the country's energy crunch.
"As other energy prices like natural gas and coal keep pushing higher, upside risks to the oil market have started to build," said Bank of America's Christopher Kuplent.
Brent crude futures rose 58 cents, or 0.7%, to $82.53 a barrel, while US West Texas Intermediate (WTI) crude futures rose $0.60, or 0.8%, to $78.90.
Earlier in the week, WTI touched its highest in nearly seven years at $79.78 while Brent hit a three-year high of $83.47.
The price run-up has been spurred by soaring European gas prices, which have encouraged a switch to oil for power generation.
It also follows a decision by the Organization of Petroleum Exporting Countries (OPEC) and allies led by Russia to stick to plans to add only 400,000 barrels per day (bpd) of supply in November.
"An acceleration in gas-to-oil switching could boost crude oil demand used to generate power this coming northern hemisphere winter," an ANZ commodities analyst said in a note.
ANZ increased its 2021 fourth-quarter crude oil demand forecast by 450,000 bpd.
The US Department of Energy said that all "tools are always on the table" to tackle tight energy supply conditions, which could include a release of oil stocks.
