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Oil Prices Spike as Easing COVID Restrictions Lead to Worldwide Surge In Demand

A combination of the increase in demand for oil, and in the prices of natural gas and coal, have led to the spike.

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Oil prices hit record highs on Monday due to rising demand, Reuters reported.

The increase in prices is also due to the increase in prices of natural gas and coal, trends that have led to its users swapping natural gas and coal with oil and diesel in order to generate power.

While the price of oil in Brent crude (an oil market) touched $86, the highest since October 2018, United States West Texas Intermediate (WTI) crude hit $83.73 (a 1.1 percent increase), the highest since October 2014.

"Easing restrictions around the world are likely to help the recovery in fuel consumption," according to analysts quoted by Reuters.

The increase in prices of crude oil is bound to hurt consumers in India, Mint reported.

It might also force the union government to either reduce fuel taxes or subsidise oil marketing companies, the report added.

(With inputs from Reuters and Mint.)

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