Scenarios over $100 are being talked about in oil

West Texas oil turned lower after hitting above $95 on Monday. Despite the US warnings that Russia could invade Ukraine at any moment, Moscow again denied the invasion allegations, calling for diplomacy.

Although geopolitical risks in Europe will be on display this week, there are signs that oil supplies will increase in the US and progress has been made in nuclear talks with Iran.

It is stated that both events can weaken the uptrend by increasing the oil flow.

While global consumption continues to increase in the world, oil prices continued to rise sharply, which started in the previous year, in 2022 due to the potential deterioration in energy supply due to the long-standing crisis in Europe. While the rise caused stocks to deplete, Brent oil traded a few dollars below the $100 level.

Warren Patterson, Director of Commodity Strategies at ING Groep NV, said, "Right now, the entire focus of the market is on the Russia-Ukraine crisis."

The fact that near-term prices are higher than long-term ones in the markets indicates tightness in supply, while the difference between Brent futures has reached its highest level since 2019 with $2.23.

Scary scenarios over $100 in bank reports

While the current outlook in the markets was like this, some investment reports started to strongly express over $100. Goldman Sachs, which previously stated that oil could see $100, noted that if there is a correction in 2022 before $105 is seen, the next peak of oil may be $125.

RBC Capital Markets, on the other hand, drew a more pessimistic scenario and compared prices with those of the 2008 crisis and the 2011–14 Arab Spring period. According to the bank, while gasoline prices were $4.09 per gallon in June due to the demand deterioration experienced during the 2008 crisis, this figure equals $5.21 today when inflation is taken into account. During the Arab Spring, prices averaged $3.50 per gallon.

Adapting these figures to the present, the bank stated that if 4 dollars per gallon is seen, barrel prices can reach 112 dollars, but if 2008 prices are reached without a demand deterioration, it can be 5 dollars per gallon, which means 150 dollars per barrel.

West Texas Oil for March delivery fell 0.6 percent to $94.52 on the Nymex market.

Brent oil for April delivery fell 0.5 percent to $96.05 on the London ICE Futures Europe market.