The oil commodity is poised to close the sixth week in a row with gains as it trades at levels close to the peak of the last seven years amid signs of stronger global demand.
West Texas oil rose more than 2% weekly to over $87. While US crude oil reached its highest level since October 2014, Brent oil also saw above $91. The geopolitical risks, which increased with the risk of Russia’s invasion of Ukraine, also played an active role in the rise of crude oil.
Oil entered 2022 with a rapid rise in prices, with many developments supporting the rise in prices. The recovery in worldwide consumption after the pandemic, the decline in stocks, and the strong appearance of physical markets caused prices to increase despite the Fed’s interest rate hike rhetoric to restrain inflation.
All eyes are on the OPEC+ meeting
Next week, attention will shift to the production increase decision that will come out of the OPEC+ meeting to be held on February 2. Although the association regularly decides to increase its monthly production, there are concerns that some members will not be able to reach the committed figures.
DBS Bank Ltd. Energy Analyst Suvro Sarkar stated that prices are at a premium of $5–7 due to geopolitical risks and said, “At the moment, it is not possible to talk about any aspect. The next OPEC+ meeting will not be an important event for prices. In the near term, every move will be shaped by the news around the Ukraine crisis.”