Oil prices, which rose 50 percent in 2021, are expected to rise considerably higher this year, according to some analysts, who believe that a lack of production capacity and restricted investment in the field would push oil to $90 or even $100 per barrel.
Despite the fact that the Omicron coronavirus variation has pushed COVID-19 instances far above last year’s highs, economists think oil prices will be sustained by many countries’ reluctance to reinstate the stringent restrictions that wreaked havoc on the global economy when the pandemic hit in 2020.
Brent crude futures touched two-month highs on Wednesday, trading near $85 a barrel.
‘I see no reason why Brent crude cannot move towards $100 in Q1, possibly sooner,’ said Jeffrey Halley, senior market analyst at OANDA. ‘Assuming China does not experience a sharp slowdown, that Omicron actually becomes Omi-gone, and with OPEC+’s ability to raise production clearly limited, I see no reason why Brent crude cannot move towards $100 in Q1, possibly sooner,’ Jeffrey Halley added.
OPEC and its allies, known as OPEC+, are progressively easing output curbs imposed when demand fell in 2020.
Many smaller producers, on the other hand, are unable to increase output, and others are hesitant of pumping too much oil in case of further COVID-19 difficulties.
Post Your Comments