Due to tension in Ukraine, oil exceeds $90 and a warning of market volatility

Today, Thursday, oil traded at its highest level in seven years, at about $90 a barrel, as the Ukraine crisis supported prices, despite indications that the US Federal Reserve would tighten monetary policy.

Brent crude futures rose 6 cents, or 0.1%, to $90.02 a barrel by 11:13 GMT.

While futures contracts for West Texas Intermediate crude fell two years to 87.33 dollars a barrel, but it returned to rise again.

Oil prices rose yesterday, with Brent crude rising above $90 a barrel for the first time in 7 years, amid tensions between Russia and the West.

Russia, the world’s second-largest oil producer, is at odds with the West over Ukraine, raising fears of a disruption to crude supplies to Europe.

The market’s attention is focused on the next meeting on February 2 of the “OPEC Plus” group, which includes the Organization of the Petroleum Exporting Countries (OPEC), along with other producers, including Russia.

Does “OPEC Plus” adhere to its policy?

The group is likely to adhere to its plans to increase the target level of oil production next March, according to several sources from this group told Reuters.

“OPEC Plus” has increased the target level of production every month since August by 400,000 barrels per day, gradually abandoning a record production cut in 2020.

However, this group faced challenges represented in the available production capacity, which prevented some members from increasing production according to their quotas.

But rising US crude and gasoline stocks eased some of the supply worries.

The US Energy Information Administration said that the country’s crude stocks rose last week by 2.4 million barrels, compared to expectations for a decrease of 728,000 barrels, in a Reuters poll of analysts’ opinions.

Gasoline stocks rose by 1.3 million barrels, the largest increase since February 2021.

Oil and gas sector investments

Meanwhile, Nayef Abdullah Al-Mishil, Saudi Deputy Energy Minister for Planning, said today that the world needs investment in oil and natural gas projects to grow at a rate of 5% annually, to meet the expected demand in the short term until 2025.

And the US Bloomberg Agency quoted Al-Mishel as saying, during the investment forum for Japan and the Gulf Cooperation Council, that without these investments, the oil market is likely to witness more volatility.

Al-Mishel also mentioned that global investments in oil and gas production projects have declined by 30% over the past two years.

The Saudi official expected a recovery in global oil demand, and a return to levels before the Corona virus pandemic during the current year.

It also predicted that the primary global demand for energy will grow by 28% by 2045, mainly thanks to recovery and economic growth.

Saudi Arabia is the third largest oil producer in the world and the largest exporter, and is part of the “OPEC Plus” alliance.

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