Brent oil jumps to 7-year high | Oil and Gas News

Fears about the impact of Omicron’s demand are fading as supplies are tightened due to some disruptions.

Brent oil has risen to a seven-year high as strong demand and tight supply heat up physical markets in the world’s largest consumer region.

London futures rose to $ 88.13 a barrel, the highest since October 2014. Traders are paying higher and higher premiums for the Asian load, while fears of omicron demand are fading as supplies are squeezed out of Libya due to some disruptions in the North. America. An attack by drones on oil installations in the Basque Country on Monday sparked geopolitical risks.

Goldman Sachs Group Inc. raised its Brent forecast for 2022 and 2023 and forecast $ 100 in oil in the third quarter. Strong bases have reversed last year’s fall in prices, keeping the market in a staggering deficit, he said.

“Demand destruction of Omicron has been less than feared, but the main drivers are supply,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “Demand continues to rise and replacement capacity continues to fall, so prices should remain the same this year.”

The oil rally poses a challenge for consumer nations and central banks as they try to ward off inflation while supporting global growth. In fact, it is a headache for President Joe Biden, touching the emergency depots and linking it to OPEC, as efforts to reduce gasoline prices are to no avail.

Gross has made a good start to the year with producer disruptions, including in Libya, adding to the toughness brought by strong demand. There are cheerful signs from the entire oil complex, from diesel to aircraft fuel, and it is rising in Europe as air travel is affected by omicron. The Organization of the Petroleum Exporting Countries will release its monthly report on Tuesday, giving a picture of the market.

The strength of the physical market has been compounded by the renewed tension in the Persian Gulf, which accounts for about 40% of the world’s marine oil.

Yemeni Houthi fighters claimed to have attacked drones in the United Arab Emirates, causing an explosion and fire outside the capital Abu Dhabi. The nation is the third largest producer in OPEC.

“Market sentiment remains constructive, and the attack on the Basque Country has only given prices another boost,” said Warren Patterson, head of raw materials strategy at ING Groep NV. “Supply shortages, along with strong demand, mean that the oil market is tighter than expected.”

Prices

• The March settlement was Brent 92 cents higher at $ 87.40 a barrel in exchange for ICE Futures Europe at 12:06 p.m. It has reached its highest level since October 2014.
• The season-wide decline was 71 cents a barrel, up from 74 cents a week earlier.
• West Texas Intermediate earned $ 1.23 for a February delivery to $ 85.05 on Friday on the New York Mercantile Exchange.
• There was no settlement in the US on Monday for Martin Luther King Jr. Due to the day’s holiday, transactions will be booked on Tuesday.

Other market news:

• China is still working on details of when and how much oil needs to be released from its strategic reserves, while the nation takes small steps to implement a US-led plan to reduce rising energy costs.
• OPEC + has done much to stabilize the energy market and other oil producers should follow suit, said Saudi Arabian Energy Minister Abdulaziz bin Salman in Dubai.
• Vista oil drill expanded its surface in the shale formation Vaca Muerta in Argentina with Wintershall DEA taking full ownership of the two companies.