At its highest level since 2014, oil is crawling towards $90
OPEC officials told Reuters that the rise of oil may continue over the next few months due to the recovery in demand and limited production capacity of members of “OPEC Plus”, and that prices may exceed $100 a barrel.
Oil prices rose on Wednesday for a fourth day in a row, after a fire in a pipeline from Iraq to Turkey briefly halted supplies, raising concerns about an already-existing outlook for near-term tightness.
Brent crude futures rose by 0.6% to $87.99 a barrel by 12:45 GMT, after rising 1.2% in the previous session.
The European benchmark crude touched $89.05, the highest level since October 13, 2014.
US West Texas Intermediate crude futures rose 66 cents 0.8% to $86.09 a barrel.
West Texas Intermediate crude earlier climbed to a peak of $87.08, the highest level since October 9, 2014.
A senior security source said that the explosion that set fire to the pipeline in Kahramanmaras province (southeast of Turkey) was caused by the fall of an electricity pole and was not an attack.
The pipeline transports crude from Iraq (the second largest producer in the Organization of Petroleum Exporting Countries “OPEC”) to the Turkish port of Ceyhan for export.
This comes at a time when analysts expect limited supplies of oil in 2022, which is due to reasons such as increased demand much more than what was expected in light of the highly contagious mutated Omicron strain of the Corona virus, and some point to the return of the oil price to $ 100 a barrel.
Exacerbating supply concerns, geopolitical problems in Russia (the second largest oil producer in the world) and the UAE (the third largest oil producer in OPEC).
The International Energy Agency said on Wednesday that the market is expected to turn into a surplus in the first quarter of this year.
However, the agency warned that stocks of oil and commercial fuels in OECD countries are at their lowest levels in 7 years, and that lower supplies could cause the oil market to fluctuate in 2022.
The Organization of the Petroleum Exporting Countries, Russia and other producing countries – which together form a bloc known as “OPEC Plus” – are already facing difficulty in reaching the targeted monthly production increase of 400,000 barrels per day.
OPEC officials told Reuters that the rise of oil may continue over the next few months due to the recovery in demand and the limited production capacity of members of “OPEC Plus”, and that prices may exceed $100 a barrel.