Oil prices rose for a seventh straight week as investors focused on rapidly tightening global markets and geopolitical tensions.
West Texas Intermediate (WTI) hit a fresh seven-year high near $92 a barrel and is set to gain more than 4% this week. Brent has surged 18% since the start of the year, with banks including Goldman Sachs expecting it to hit $100.
This week’s gains were driven by a combination of factors. Investors are skeptical that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will be able to fully implement plans to increase production. Meanwhile, traders are tracking the situation in Ukraine amid fears of a planned Russian invasion, which Moscow denies. In Texas, a wave of cold weather affected some supplies.
Oil has surged over the past year and commodity prices have generally risen as demand recovers from the painful effects of the pandemic. The rally cut inventories and prompted traders to pay hefty premiums to secure near-term supplies. The jump will fuel inflationary pressures, squeeze consumers and alert politicians concerned about the fast-rising cost of living.
“Oil prices remain constructive amid solid fundamentals,” said John Driscoll, director of JTD Energy Services Pte in Singapore. “OPEC continues to miss its goals, although it is expected to do better.”
Complete News Source : Business Standard
