Americas News
More Weekly Gains For Oil As Demand, Drawdowns Show No Signs Of Abating
Friday saw oil prices achieve a seventh straight week of gains, propelled by everything from ongoing worries of supply disruptions to demand strength – the latest example being strong U.S. jobs figures in January despite media fear mongering over the omicron variant.
Brent rose $2.25 to $93.36 per barrel by1532 GMT, while West Texas Intermediate rose $2.59 to $92.86 per barrel; so far this year, WTI has rallied nearly 24 percent while Brent has gained 20 percent.
Ed Moya, senior market analyst for the Americas at Oanda Corp, remarked, "The rally in crude prices is showing no signs of slowing down as both supply and demand drivers remain very bullish.
"Geopolitical risks that include Russia-Ukraine tensions and Iran nuclear talks are also wildcards for oil prices as they seem more likely to lead to a tighter market over the short-term."
Many analysts maintain that prices hitting $100 are practically inevitable, and currently there are the equivalent of almost 112 million barrels of $100 calls for Brent over the next 12 months (call options sold by banks in the $90s are also said to be contributing to the commodity's powerhouse performance).
But Bjørnar Tonhaugen, head of oil markets at Rystad Energy, sounded a note of caution on Friday by saying, "A spike towards $100 crude should not be ruled out in the short run, but downside risks are plentiful, including omicron setbacks on demand, economic growth concerns and financial market corrections as the central banks fight inflation."
Also, supply concerns driving oil prices seem to be a short term prospect: following ConocoPhillips stating that U.S. crude production may grow as much as 900,000 barrels per day (bpd) this year, Rene Santos, manager for North American supply at S&P Global Platts Analytics, said on Friday that "We expect exit-to-entry growth of 880,000 bpd and average 12.05 million bpd in 2022."
Finally on Friday, Bloomberg reported that oil majors are erasing all losses since the onset of the pandemic, with Shell, BP, and TotalEnergies leading a Stoxx Europe 600 energy sub index rally that is currently outperforming all sectors.
