Oil Posts Fifth Straight Weekly Gain As Warnings Of Brent Hitting $150 Surface

Meanwhile, the G7 implore OPEC to open their taps and relieve the crunch: File Image/Pixabay

With abundant signs that the oil market is tight globally and a warning that Brent futures could soar to $150 per barrel, crude prices on Friday posted a fifth straight weekly gain.

Prices also were said to have risen due to news that Iran’s paramilitary Revolutionary Guard had seized two Greek oil tankers in the Persian Gulf.

West Texas Intermediate settled up 98 cents to $115.07 per barrel, while Brent settled up $2.03 at $119.43 per barrel; and the WTI December-December spread touched a fresh record high on Friday, reflecting what Livia Gallarati, senior oil analyst at Energy Aspects, described as reflecting “the risk of tank bottoms at Cushing and the need to keep more barrels at home.”

For the week, Brent rose 6 percent while WTI gained 1.5 percent.

John Kilduff, founding partner at Again Capital, remarked that “Demand is strong with products leading the way, especially gasoline which dragged crude oil up with it.”

Phil Flynn, senior market analyst at Price Futures Group Inc., added, “We are seeing assumptions that the demand for oil and gas may be stronger as the stock market suggests that fears of a recession may be being overplayed.”

Meanwhile, the latest development in lockdown China on Friday was that people familiar with the matter claim the government may issue state refiners additional fuel-export quotas to refiners in order to clear high inventories that have swelled (to what consultancy JLC thinks could total 3.5 million tons).

But China appears to be an anomaly in a world thirsty for more fossil fuel, and Bank of America analysts led by Francisco Blanch wrote in a report released Friday that “If supply does not recover, oil demand may have to ease,” adding that Brent could top $150.

Indeed, although it has steadfastly refused to open the taps, the Organization of the Petroleum Exporting Countries (OPEC) on Friday were yet again urged – this time by the Group of Seven – to reconsider their stance in advance of a meeting next week.

The Group also stated in a letter that it was a matter of “special urgency” for the European Union to decrease its dependency on Russian natural gas, and stressed the important role increased supplies of liquefied natural gas (LNG) could play “in order to mitigate potential supply disruptions of pipeline gas, especially to European markets.”

But it’s doubtful whether the cartel will respond, especially in light of de facto leader Saudi Arabia stating earlier this month that it would stand by Russia as a participant of OPEC despite tightening western sanctions on Moscow.

Also on Friday, pushback to the U.K.’s announcement of a 25 percent tax on oil and gas firms (which is expected to raise about $6.3 billion and will finance grants to the poorest households in the nation) took the form of BP stating it will review its investment plans, giving credence to critics who warned that the tax proposal doesn’t include enough incentives to preserve investment overall.