Brent crude futures were up 95 cents, or 1.13%, to $ 84.67 a barrel, while US West Texas Intermediate (WTI) oil futures were up $ 1.42, or 1.75. %, at $ 82.64 a barrel. Both contracts added their sixth session to the rise in the last eight.
The Brent contract shows increasing backwardation, as the spot delivery contract is about $ 4.41 more expensive than the six-month contract, indicating that supplies are currently tight, traders said.
The OPEC + countries still maintain production cuts of more than 3 million barrels per day, while sanctions on Iran limit their exports. Although OPEC + producers are raising their pumping targets every month, technical difficulties have prevented several countries from meeting their quotas.
Forecasts 2022
The prices of the Petroleum, which rose 50% in 2021, will continue to rise this year, according to analysts, who say a lack of production capacity and low investment in the sector could push crude above $ 100 a barrel.
Although the Omicron variant of the coronavirus has propelled COVID-19 cases well above the highs reached last year, analysts say oil prices will be underpinned by the reluctance of many governments to reinstate the strict restrictions that hit the world economy when the pandemic set in in 2020.
“Assuming China doesn’t suffer a sharp slowdown, omicron wears off, and with OPEC +’s ability to increase production clearly limited, I see no reason why Brent crude can’t get anywhere near $ 100 in the first quarter, possibly sooner, “said Jeffrey Halley, market analyst at OANDA.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, are gradually relaxing the production cuts implemented when demand plummeted in 2020. However, many of the smaller producers are unable to increase supply and others have been cautious to time to pump too much oil in the event of new COVID-19 setbacks.
“We don’t want to see $ 100 a barrel. The world is not ready for that,” Omani Oil Minister Mohammed Al Rumhi said Tuesday, as quoted by Bloomberg. Morgan Stanley predicts that Brent crude will hit $ 90 a barrel in the third quarter of this year.
With the prospect of crude inventories depleting and reserve capacity tight by the second half of 2022, and limited investments in the oil and gas sector, the market will have little margin of safety, the bank said.
Standard CharteredFor its part, it raised its Brent forecast for 2022 by US $ 8, to US $ 75 per barrel, and its Brent forecast for 2023 by US $ 17, to US $ 77. JP Morgan analysts also expect oil prices to rise to as high as $ 90 by the end of the year.
Lhe strength of current demand is acting as a short-term driver of prices, having proven largely immune to rising coronavirus infections, according to the bank.
Source From: Ambito
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