Crude Oil Closes in Plus Due to Supply Concerns

Crude oil futures closed higher on Friday (January 28) and recorded a strong increase this week. This was driven by forecasts that oil supplies on the world market could tighten.

  • WTI crude futures were up 21 cents, or 0.24%, at $86.82 a barrel.
  • BRENT crude futures were up 69 cents, or 0.77%, at $90.03 a barrel.

Both crude oil futures rose for the sixth week in a row. This is the longest upward trend since Oct. 2021, as investors expect OPEC and allies to continue to adhere to the original agreement when they meet next week, despite pressure from the United States and its allies for OPEC+ to further increase oil production.

Previously, OPEC+ decided in July 2021 to increase oil production by 400,000 barrels per day per month until April 2022.

Carsten Fritz, Energy analyst at Commerce Bank Research, said Friday, “There is no new reason to explain the new surge in crude oil prices. The market is still concerned about the supply disruption problem. If the Ukrainian crisis intensifies”

Political tensions between Russia, the world’s second-largest oil producer, and Western powers over Ukraine, plus the threat to the United Arab Emirates from Yemen’s Houthi movement, are raising concerns about energy supplies.

Goldman Sachs, Morgan Stanley, and JPMorgan expect oil prices to reach $100/barrel this year due to tight oil market conditions and strong demand.

In Asia, China’s crude oil imports could rise by as much as 7% in 2022, analysts and oil company officials said. The world’s largest oil importer is gradually reversing its previously declining oil imports in 2021 as buyers increase their purchases of freshly refined oil to replenish inventories.

The Spot Market is Closed

Saturday, January 29, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.40

87.29

+0.68

0.79%

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