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US crude futures topped $80 a barrel for the first time since November 2014 as a global energy crisis boosts demand at a time when OPEC+ producers are keeping supplies tight.

Futures in New York rose as much as 2.3% on Friday and are poised for a seventh straight weekly gain, the longest stretch of advances since December. A weakening of the dollar on the back of worse-than-expected U.S. labor market data also boosted the appeal of commodities priced in the currency.

This week brought many indications that supplies will remain constrained: Saudi Aramco said a global natural gas shortage was already boosting oil demand for power generation and heating, and the U.S. Energy Department said that it had no plans “at this time" to tap the nation’s oil reserves.

Saudi Arabia and its partners opted to only modestly increase output in November. Many analysts had expected OPEC+ to deliver a bigger hike as the surge in natural gas prices looks set to cause a further spike in oil demand this winter.

The economic recovery from the pandemic, along with a supply disruption in the U.S. Gulf of Mexico following Hurricane Ida, had already tightened the market before rising natural gas prices spurred additional demand for oil products like diesel and fuel oil.

Meanwhile, various underlying oil market gauges are also showing signs of strength. West Texas Intermediate crude’s nearest contract traded at a 47 cent premium to second-month futures, the widest since August in a sign of rising demand and tight supplies. The so-called prompt has been increasing as more of the world attempts to substitute fuel oil for natural gas as quickly as possible. 

“They don’t need to buy it a month from now, they needed it yesterday," said Bob Yawger, director of the futures division at Mizuho Securities USA. “It’s a panic buyer’s situation."

Meanwhile, China is still facing power outages and Beijing has ordered its state-owned firms to secure energy supplies for winter at all costs. Chinese fuel oil futures jumped almost 10% on Friday as local markets resumed after a week-long national holiday.

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