ISLAMABAD: Crude oil’s bull run is showing no signs of slowing, as prices surged around 2 percent on Tuesday to their highest levels since October 2014.
As of 1320 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $1.13 (+1.27 percent) to reach $87.58 a barrel. The benchmark hit $87.85 a barrel during the session.
On the other hand, the US West Texas Intermediate (WTI) price reached $85.38 a barrel, up by $1.56 (+1.86 percent). WTI crude futures rose to $85.53 during the early trading.
The price for Opec Basket was recorded at $85.46 a barrel with a gain of 0.87 percent, Arab Light was available at $87.62 a barrel with an increase of 1.55 percent and the price of Russian Sokol jumped to $89.66 a barrel with an increase of 1.54 percent.
The supply concerns are giving the market a solid boost. Frantic oil buying, driven by supply outages and signs the Omicron variant will not be as disruptive as feared for fuel demand, has pushed some crude grades to multi-year highs, suggesting the rally could be sustained a while longer. The Opec+ is still nowhere near pumping to its overall quota, and this narrowing cushion could turn out to be the most bullish factor for oil prices over the coming months.
Crude oil prices have posted four consecutive weeks of gains, which has been the longest winning streak since October 2021, in evidence that the demand recovery remains robust as fears about the effect of Omicron die down.
Several banks have forecast oil prices of $100 a barrel this year, with demand expected to outstrip supply, thanks in large part to OPEC’s limited capacity. Morgan Stanley predicts that Brent crude will hit $90 a barrel in the third quarter of this year, while JPMorgan has forecast oil to hit $125 a barrel this year and $150 in 2023.
Saudi Arabia on Monday said oil stability is paramount and its alliance with the super group of producers has taken measures to ensure energy security.
“We believe Opec+ have done a lot in bringing about stability,” Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said while speaking during Abu Dhabi Sustainability Week summit.
The Opec+ group, led by Saudi Arabia and Russia executed a historic reduction of 9.7 million barrels per day between May 2020 and July last year, but has tapered the supply cuts as demand improved. The group agreed to add another 400,000 barrels of oil per day to the market from February.
