Crude Oil Bulls Set Sights On $100 A Barrel
Wednesday’s rise in U.S. oil prices marked a fifth consecutive day of gains on signs of tightness in the crude, natural gas, and coal markets.
Brent crude prices rose for a fourth day on supply anxiety as well, especially after OPEC and its allies opted not to boost their planned output further on Monday.
Prices for West Texas Intermediate reached the highest level since November 10, 2014, above $79 a barrel at the time of writing.
The Brent crude oil price rose by 0.15% to $82.68 per barrel after having reached a three-year high earlier in the session.
Prices have risen by more than 25% over the past seven weeks, almost uninterrupted. However, the rally is not yet over. Almost all of the rise since the past correction has come from recovering from that correction.
Other energy products like Gas and coal have gained much more momentum than oil, and the price of oil may continue to rise in the near future.
There is an interest in oil among buyers because OPEC+ has resisted increasing production. Generally, further price rallies follow the recent price correction and breaking of previous highs.
The oil cartel+ agreed on Monday to stick to its July agreement to increase production by 400,000 barrels per day each month through at least April 2022, phasing out the existing 5.8 million barrels per day cuts.
Despite the energy crisis driving demand higher, crude oil extended gains amid concerns about a tight market.
As a result of the energy crunch across the globe, the (OPEC+) increase was well below what the market had expected. If demand continues to surge, it is not surprising that OPEC may be forced to act before the next scheduled meeting.
OPEC+ Joint Technical Committee announced that it expected a deficit of 1.1 million barrels per day this year, which could turn into a surplus of 1.4 million barrels per day next year.
As a result of the increase in oil prices, many of the world’s major oil consumers, including the United States and India, are worried that such inflationary pressures will slow recovery from the COVID-19 pandemic.
OPEC+ was still concerned that a fourth global wave of COVID-19 infections could hinder demand recovery despite pressure to ramp up output.