Oil rose above $86 a barrel after Saudi Arabia said the OPEC+ alliance should maintain a cautious approach to managing global crude supplies given the threat to demand still posed by the pandemic. Global Brent supplies rose 0.8%, building on seven straight weekly gains, while West Texas Intermediate hit its highest since 2014. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman told Bloomberg Television over the weekend that producers should not take rising price gains for granted. That conservative stance was echoed by Nigeria and Azerbaijan. Oil has more than doubled over the past 12 months, with inflation concerns easing somewhat as the global economy recovers from the disruption caused by the coronavirus pandemic. While consumption has surged, the Organization of the Petroleum Exporting Countries and its allies have held back from easing draconian supply cuts imposed in 2020 to save prices. That pushed Brent to its highest since 2018 as stockpiles fell and key time frames rose. “The Saudi comments reinforce the view that OPEC+ will stick to its cautious approach. And with demand looking better, that could mean the market will continue to tighten for the rest of the year,” said Warren Patterson, head of commodity strategies at ING Groep, NV in Singapore. “So any further tightening, of course, leaves the potential for further volatility.” Crude’s rally has been supported by a strong rally in natural gas, which has boosted demand for oil products as a substitute. Prince Abdulaziz, meanwhile, said consumption could rise by 500,000-600,000 barrels a day if the Northern Hemisphere winter is colder than usual and companies switch from gas to crude. He also warned that more barrels from OPEC+ would do little to curb gas costs in Europe and Asia, or gasoline in the U.S. Oil bull Goldman Sachs Group Inc. weighed in with another positive outlook, saying gas-to-oil switching could add 1 million barrels a day to global demand. “Most importantly, we expect demand to remain close to pre-COVID levels this winter, even below average winter temperatures,” the bank said in an Oct. 24 note. But in a sign the pandemic remains a challenge, China has been dealing with a new outbreak of COVID-19 caused by the imported Delta variant. The wave of infections has spread to 11 provinces in the week since Oct. 17, Mi Feng, a spokesman for the National Health Commission, told a briefing. OPEC+ is currently increasing daily output by 400,000 barrels each month, and has resisted pressure to do more. The tightness has been exacerbated by some members failing to meet their quotas, with the cartel next meeting on Nov. 4. With stocks falling, the market is firmly in backwardation, a bullish pattern characterized by near-term prices trading above those farther out. The gap between the WTI contract for December this year and the same month in 2022 has widened to about $12 a barrel. The difference between the two nearest contracts, known as the prompt spread, jumped to $1.38 a barrel from 75 cents a week ago. "WTI is also dragging Brent higher," Patterson said. "There are clear concerns about Cushing inventory levels, which is well reflected in the WTI prompt spread." That's the explanation of the news about "Saudi Arabia Watches Supply, Brent Oil Drops $86" from GICTrade. Also read other news and articles discussing banking, economics and forex in the GIC Journal. Also watch the video explaining forex from the basics in the trading for freedom video and premium content video.