Oil prices rose up highest for the first time in 2022

By CIOReview | Wednesday, May 4, 2022

Oil prices rose for the first time in a year, fueled by a supply shortage and political concerns in Eastern Europe and the Middle East.

FREMONT, CA: On Monday, 31 January, oil prices rose for the first time in a year, fueled by a supply shortage and political concerns in Eastern Europe and the Middle East. The most actively traded Brent contract, for April 2021 delivery, settled at 89.26 dollars per barrel, up 74 cents or 0.8 percent. The front-month contract for March, 2021, delivery increased 1.18 dollars, or 1.3 percent, to 91.21 dollars at the end of the session. US West Texas Intermediate crude closed at 88.15 dollars a barrel, up 1.33 dollars, or 1.5 percent.

On Friday, 28 January, 2022, the benchmarks hit their best levels since October 2014, with 91.70 dollars and 88.84 dollars, respectively, marking their sixth consecutive weekly advance. In February, 2022, they increased by roughly 17 percent, the largest since February 2021. When OPEC+ meets on Wednesday, 2 February, market experts and Reuters sources anticipate the Organization of the Petroleum Exporting Countries and its allies, led by Russia, to stick to its policy of moderate output increases.

Since August, 2021, OPEC+ producers have increased their supply by 400,000 barrels per day per month. According to Louise Dickson, senior oil markets analyst at Rystad Energy, monthly supply increases of 400,000 bpd are either too immaterial for the market to grasp and, more significantly, not being properly fulfilled by the group. The only short-term option for balancing the supply-short oil market will have to come from OPEC+, led by Saudi Arabia, the greatest spare capacity producer.

According to a Reuters survey, OPEC's oil output in January, 2022, fell short of the increase planned under a deal with allies, underlining some producers' struggle to pump more even while prices are at a seven-year high. Furthermore, in January, geopolitical tensions between Russia and the United Arab Emirates, two significant oil producers, reached new heights.