Muscat- The Oman Cude broke the $100 US barrier on Friday, closing at $100.31 for delivery next May.
The Omani crude price increased by $5.84 from Thursday's $94.47.
The monthly average price of Omani crude oil for March delivery was $62.17 per barrel, an increase of 8 cents from the delivery price last February.
July 18, 2022: Oman crude for September delivery reached $102.68 per barrel.
August 2022: Prices began to retreat, trading in a tight range just below $100 due to global recession fears.
March 1, 2022: The price first breached the $100 mark ($100.85) for the first time in seven years, driven by the Russia-Ukraine conflict.
Global oil prices are on track to record their biggest weekly gains since 2022, affected by the war waged by the United States and Israel on Iran and the turmoil in energy markets, as producers, importers, and shipping companies face difficulties in dealing with the repercussions
According to Vijay Valecha, Chief Investment Officer, Century Financial, "Global energy markets have been rocked by the war, which has spread across the Middle East, hoisting oil, gas, and product prices, lifting freight rates, and spawning disruption for producers and importing nations. Storage capacity-driven supply shut-ins in the Middle East have begun."
The key question now is how quickly production can return once export routes normalise. Bloomberg estimates suggest that most fields can restart within days, with full capacity typically restored within 2 to 3 weeks.
Airlines and other large fuel buyers have been loading up on oil derivatives contracts (higher call option volumes) to keep their bills from spiralling as oil prices hit multi-year highs. US to Asia oil shipment costs hit a record. "
As of Wednesday, the shipping rate was about $14.50 a barrel, which is almost 20% of the WTI futures price (hovering around $75 yesterday). Also, the backwardation in WTI continues to increase, with WTI’s prompt spread (April-May Futures contract) now at 1.5 and inching closer towards its June 2025 high of 1.69. The Brent-WTI spread dipped yesterday to 6.58 after touching a multi-year high of 6.84.
In the US, meanwhile, nationwide crude stockpiles expanded by about 3.5 million barrels last week to reach the highest since last May, according to the EIA report released yesterday.
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