1 Feb 2022
Oil Surges Spurred by Post-Pandemic Recovery and Tightening Supply
The Index Today
Oil rose on Tuesday, reaching close to seven-year high prices as global demand returns after a pandemic-induced slump followed by tightening supplies due to geopolitical tensions in the Middle East and Eastern Europe.
Brent crude for April delivery soared by 0.4% at $89.60 per barrel at 0455 GMT. The U.S. West Texas Intermediate (WTI) crude also rose by 0.4% at $88.47 a barrel, after inching up 1.5% the previous day.
Hiroyuki Kikukawa, Nissan’s General Manager of Research, says, “The market is maintaining a bullish tone on expectations that supply tightness will continue as demand is picking up, with receding fears over spreading Omicron coronavirus variant." He also added, "All eyes are on OPEC+ decision as well as development of the conflict between Russia and the West over Ukraine."
According to market experts and sources from Reuters, the Organization of the Petroleum Exporting Countries and allies (OPEC+) helmed by Russia are expected to stick to their original production plan to achieve its March output goals as it attempts to keep up with global demand.
The ongoing tensions between Russia and Ukraine have sparked fears of late, of a possibly disrupted energy supply schedule as the world’s second largest oil producer plans to invade Ukraine.