Global benchmark Brent crude closed at $ 91.11 a barrel, up $ 1.64, or 1.8%, while West Texas Intermediate crude jumped $ 2.01, or 2.3%, higher to end at $ 90.27 a barrel, the first time the U.S. benchmark closed above the $ 90 level since 6 Oct. 2014.
Oil prices soared in late trading Thursday, sending the benchmark U.S. crude through $ 90 a barrel for the first time since 2014 due to persistent supply concerns and cold weather hitting the entire United States. Global benchmark Brent crude closed at $ 91.11 a barrel, up $ 1.64, or 1.8%, while West Texas Intermediate crude jumped $ 2.01, or 2.3%, higher to end at $ 90.27 a barrel, the first time the U.S. benchmark closed above the $ 90 level since 6 Oct. 2014. Analysts attributed the late rise to growing concerns that prolonged cold weather could affect production in Texas, exacerbating congestion in world crude oil markets.
More than 200,000 people have lost power across the United States as a result of the cold so far, and memories of Hurricane Ida a year ago that wiped out power to millions of Texas residents, remain in the forefront. “It’s hysteria or some kind of fear,” said Bob Yawger, director of energy futures at Mizuho. “In the last hour, discussions have started to drive (oil) higher.” The market is also watching developments between Russia and the West regarding Russia’s aggressive attitude towards Ukraine.
The United States has warned that Russia plans to use staged attacks as justification for attacking the neighboring country. Russian President Vladimir Putin has blamed NATO and the West for escalating tensions, even as he has evacuated thousands of troops near the Ukrainian border. “The tensions around the Ukraine conflict provide support, and we’ve increased global demand and we’re not really increasing supply to meet it,” said Gary Cunningham, director of market research at Tradition Energy.
The crude benchmark has been showing upwards for several weeks with expectations that supply will tighten further even after OPEC+ producers are stuck on a planned modest production increase. Demand remains on the rise, with the Omicron coronavirus variant only temporarily reducing use in major economies. The Russian -led Organization of Petroleum Exporting Countries and its allies, known as OPEC+, this week agreed to maintain a monthly increase of 400,000 barrels per day (bpd) in production despite pressure from consumers to increase supply more quickly.
Goldman Sachs analysts forecast Brent topped $ 100 a barrel in the third quarter. The brokerage has predicted that OPEC+ might consider stopping its production cuts sooner. Some OPEC members are struggling to pump more even as prices are at a seven -year high. Iraq pumped 4.16 million barrels of oil in January, below its limit of 4.28 million barrels a day under the OPEC+deal, data from state -owned marketer SOMO seen by Reuters showed.
Analysts have seen U.S. output as a savior, even as production slumped to 11.5 million barrels a day in the most recent week, and far from the 2019 record of 12.3 million barrels a day, according to federal data. ConocoPhillips chief executive Ryan Lance, however, said high prices could cause U.S. oil producers to increase production too quickly, resulting in oversupply.
“If we get back to growth levels in the U.S.” comparable to the 2014-2015 shale boom, Lance said, and “you’re not worried about it, you should be,” he told investors during a conference call.
(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)
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