Oil price breaks seven-year records on supply worries


24 January 2022

Oil prices continue to rise on Wednesday, renewing the highs since 2014 due to the risks of supply disruptions from the Middle East, Interfax reports.

 The price of March futures for Brent oil on the London ICE Futures exchange by 08:11 Moscow time was $88.36 per barrel, which is $0.85 (0.97%) higher than the closing price of the previous session. As a result of trading on Tuesday, these contracts rose by $1.03 (1.2%) to $87.51 per barrel.

 The price of futures for WTI oil for February in electronic trading on the New York Mercantile Exchange (NYMEX) by this time amounted to $86.41 per barrel, which is $0.98 (1.15%) higher than the final value of the previous session. By the close of trading the day before, the cost of these contracts rose by $1.61 (1.9%) and amounted to $85.43 per barrel.

 The day before, both brands closed at their highest levels since October 13, 2014, according to FactSet data.

 Prices are supported by fears of a shortage of fuel in the world market due to supply cuts and the inability of some OPEC countries to increase production to agreed levels, writes Trading Economics.

 Meanwhile, on the night of Tuesday to Wednesday, an explosion occurred on the large Kirkuk-Ceyhan oil pipeline connecting Iraq and Turkey, due to which the operation of the pipeline was suspended, media reported. The cause of the explosion has not yet been established. More than 450,000 barrels of oil are pumped through the pipeline every day.

 Earlier it became known about the impact of drones on the territory of the UAE, as a result, damage was caused to three oil tanks in Abu Dhabi.

 «Global oil benchmarks are rising to levels not seen in almost eight years on low supply forecasts and complications from tensions in the Middle East», Louise Dixon, senior oil market analyst at Rystad Energy, wrote.