Oman crude crosses $90/b mark
Published: 04:02 PM,Feb 04,2022 | EDITED : 08:02 PM,Feb 04,2022
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The price of Oman crude (for delivery in April 2022) climbed above the $90 per barrel mark on Friday to settle at $90.65 per barrel, scaling seven year-highs that were also witnessed by other international benchmarks.
Oman crude gained $2.65 per barrel in trading on the Dubai Mercantile Exchange (DME) as oil registers its longest stretch of weekly gains since October last year.
According to Reuters, oil prices reached seven-year highs on Friday as geopolitical tensions and a winter storm in the United States fuelled concerns over supply disruptions.
Brent crude rose $1.71, or 1.9 per cent, to $92.82 a barrel by 1348 GMT, having earlier touched its highest since October 2014 at $93.05.
US West Texas Intermediate crude rose by $1.84, or 2 per cent, to $92.11 after also scaling a seven-year peak at $92.33. Both benchmarks were on course for a seventh consecutive weekly gain.
“It may just be a matter of time until we’re closing in on triple figures,” said Craig Erlam, senior market analyst at OANDA.
A winter storm in Texas is behind the latest oil price rally, fuelling concerns about production outages in the Permian Basin, the largest US shale play.
Tight oil supplies pushed the six-month market structure for WTI into steep backwardation of $8.60 a barrel on Friday, the widest since November 2021.
Backwardation exists when contracts for near-term delivery are priced higher than those for later months, encouraging traders to release oil from storage to sell it promptly.
Oil markets have also gained support from tensions surrounding the Ukraine crisis, which have heightened concerns over oil supplies that are already tight.
“The late-session recovery in oil prices was also aided by fresh evidence of Opec’s struggle to raise output,” said Stephen Brennock of oil Broker PVM.
The Organisation of the Petroleum Exporting Countries (Opec) and allies led by Russia, together known as Opec+, agreed this week to stick to moderate output increases of 400,000 barrels per day (bpd), with the group already struggling to meet existing targets and despite pressure from top consumers to raise production more quickly.
Iraq, Opec’s second-largest oil producer, pumped well below its Opec+ quota in January, data from state-owned marketer SOMO showed on Thursday.
Opec+ member Kazakhstan, meanwhile, wants more of its oil output to stay at home to tackle rising fuel prices.
Commerzbank has raised its oil price forecast for the first quarter of 2022 to $90 a barrel, up from $80 previously.
(With inputs from Reuters)
Oman crude gained $2.65 per barrel in trading on the Dubai Mercantile Exchange (DME) as oil registers its longest stretch of weekly gains since October last year.
According to Reuters, oil prices reached seven-year highs on Friday as geopolitical tensions and a winter storm in the United States fuelled concerns over supply disruptions.
Brent crude rose $1.71, or 1.9 per cent, to $92.82 a barrel by 1348 GMT, having earlier touched its highest since October 2014 at $93.05.
US West Texas Intermediate crude rose by $1.84, or 2 per cent, to $92.11 after also scaling a seven-year peak at $92.33. Both benchmarks were on course for a seventh consecutive weekly gain.
“It may just be a matter of time until we’re closing in on triple figures,” said Craig Erlam, senior market analyst at OANDA.
A winter storm in Texas is behind the latest oil price rally, fuelling concerns about production outages in the Permian Basin, the largest US shale play.
Tight oil supplies pushed the six-month market structure for WTI into steep backwardation of $8.60 a barrel on Friday, the widest since November 2021.
Backwardation exists when contracts for near-term delivery are priced higher than those for later months, encouraging traders to release oil from storage to sell it promptly.
Oil markets have also gained support from tensions surrounding the Ukraine crisis, which have heightened concerns over oil supplies that are already tight.
“The late-session recovery in oil prices was also aided by fresh evidence of Opec’s struggle to raise output,” said Stephen Brennock of oil Broker PVM.
The Organisation of the Petroleum Exporting Countries (Opec) and allies led by Russia, together known as Opec+, agreed this week to stick to moderate output increases of 400,000 barrels per day (bpd), with the group already struggling to meet existing targets and despite pressure from top consumers to raise production more quickly.
Iraq, Opec’s second-largest oil producer, pumped well below its Opec+ quota in January, data from state-owned marketer SOMO showed on Thursday.
Opec+ member Kazakhstan, meanwhile, wants more of its oil output to stay at home to tackle rising fuel prices.
Commerzbank has raised its oil price forecast for the first quarter of 2022 to $90 a barrel, up from $80 previously.
(With inputs from Reuters)