Business

Oil prices reached 7-year highs as the tight supply tightens




Oil pump jacks are seen at Vaca Muerta shale oil and gas deposits in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS / Agustin Marcarian / File Photo

Sign up now for FREE unlimited access to Reuters.com

  • Brent, WTI jumps over $ 1 / barrel to the highest since October 2014
  • Tensions in the Middle East are raising concerns about shortages
  • Goldman sees crude oil stocks fall to its lowest level since 2000

LONDON, January 18 (Reuters) – Reference oil prices climbed to their highest level since 2014 on Tuesday, when possible supply disruptions following attacks in the Middle East Gulf contributed to an already tight supply outlook.

Brent oil futures rose $ 1.02, or 1.2%, to $ 87.50 per barrel by 0924 GMT, while US West Texas Intermediate (WTI) oil futures jumped $ 1.36, or 1.6%, to $ 85.18 per barrel. fat. Trade on Monday was subdued as it was an American holiday.

Both benchmark indices reached their highest levels since October 2014 on Tuesday.

Sign up now for FREE unlimited access to Reuters.com

Concerns about supply have increased this week after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-oriented group and a Saudi-led coalition. read more

After launching drone and missile attacks that set off explosions in fuel vehicles and killed three people, the Houthi movement warned that they could target more facilities, while the UAE said they reserved the right to “respond to these terrorist attacks”. read more

The UAE oil company ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers following an incident at the Mussafah fuel depot. read more

Rising tensions between OPEC + member Russia and Ukraine are also contributing to geopolitical awards. read more

In addition, some producers within the Organization of the Petroleum Exporting Countries (OPEC) are struggling to pump at their permitted capacity, due to underinvestment and interruptions, under an agreement with Russia and its allies to add 400,000 barrels per day each month.

“The consensus is that the situation will not improve in the foreseeable future and growth in oil demand coupled with supply constraints will inevitably lead to a tighter oil balance,” said PVM analyst Tamas Varga.

Goldman Sachs analysts said they expected oil stocks in OECD countries to fall to their lowest level since 2000 by the summer, with Brent oil prices rising to $ 100 later this year. read more

Sign up now for FREE unlimited access to Reuters.com

Further reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; Edited by Susan Fenton

Our standards: Thomson Reuters Trust Principles.



Source link

Back to top button