Oil prices rose for a fourth day on Wednesday after a fire on a pipeline from Iraq to Turkey briefly stopped flows, increasing concerns about an already tight short term supply outlook.
This came as officials of Organisation of Petroleum Exporting Countries (OPEC) declared that a $100 per barrel oil price is possible in the next few months.
Brent crude futures were up 81 cents, or 0.9%, to $88.32 a barrel at 1432 GMT. The benchmark contract earlier touched $89.05, its highest since Oct. 13, 2014.
U.S. West Texas Intermediate (WTI) crude futures climbed 97 cents, or 1.14%, to $86.40 a barrel. WTI earlier jumped to $87.08, its highest since Oct. 9, 2014.
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Analysts are forecasting tight oil supply in 2022, driven in part by demand holding up despite the spread of the Omicron coronavirus variant, with some predicting $100 a barrel. read more.
Security concerns involving Russia, the world’s second-largest oil producer, and the UAE, OPEC’s third-largest producer, are adding to supply fears.
Meanwhile OPEC, Russia and other producers known as OPEC+ are struggling to hit their monthly output increase target of 400,000 barrels per day (bpd).
“Unplanned outages in Libya, Ecuador, and Kazakhstan, coupled with downgrades to US, Russia, and Brazil forecasts, together result in 1 million bpd lower supply this month than previously forecasted,” Rystad Energy’s senior oil markets analyst Louise Dickson said.
OPEC officials have told Reuters that oil’s rally may continue in the next few months due to recovering demand and limited capacity in OPEC+, and prices could top $100 a barrel. read more
The International Energy Agency said on Wednesday the oil market was due to flip into surplus in the first quarter of this year.
However, the agency warned commercial oil and fuel stocks in OECD countries were at their lowest levels in seven years and dents in supply could render the oil market in 2022 volatile.
Reuters
