Oil prices settled at a three-year high above $85 a barrel on Friday, buoyed by expectations of a supply shortfall in the next few months as the easing of coronavirus-related travel restrictions boosted demand.

Brent crude futures rose 86 cents, or 1%, to $84.86 a barrel. Prices for the first month, which touched their highest level since October 2018 at $85.10, posted a weekly rise of 3%, their sixth consecutive weekly gain.

US West Texas Intermediate crude futures rose 97 cents, or 1.2%, to $82.28 a barrel. It rose 3.5% during the week in its eighth consecutive weekly gain.

Demand surged with the recovery from the COVID-19 pandemic, with another batch of power generators switching from using expensive gas and coal to fuel oil and diesel.

The White House said it will lift travel restrictions for the novel coronavirus (Covid-19) for fully vaccinated foreign nationals starting November 8, which should boost demand for jet fuel.

Meanwhile, a sharp decline in oil inventories in the United States and member countries of the Organization for Economic Cooperation and Development is expected to keep global supplies tight.

“It will take three events to derail this rise in oil prices: OPEC+ unexpectedly boosted production, warm weather hitting the northern hemisphere, and if the Biden administration taps into strategic oil reserves,” said Edward Moya, senior market analyst at Oanda.

US energy companies this week added oil and natural gas rigs for the sixth week in a row as higher crude oil prices pushed drillers back to the rig.

The number of US oil and gas rigs, an early indicator of future production, rose 10 to 543 in the week to October 15, the highest level since April 2020, energy services company Baker Hughes said in its closely watched report on Friday.

The International Energy Agency said on Thursday that the energy crisis is expected to boost oil demand by 500,000 barrels per day.

This will lead to a supply gap of about 700,000 barrels per day until the end of this year, until the Organization of the Petroleum Exporting Countries (OPEC +) and its allies add more supplies as planned in January.

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