Supply risks have pushed international oil prices significantly higher

2022-05-03 0 By

The international crude oil futures price rose sharply on Thursday after breaking the $90 per barrel mark on Wednesday due to concerns over the supply of crude oil.Light crude for March delivery rose $2.04, or 2.26%, to settle at $92.31 a barrel on the New York Mercantile Exchange.London Brent crude for April delivery rose $2.16, or 2.37%, to settle at $93.27 a barrel.Market analysts believe that extreme weather, production bottlenecks in oil-producing countries and geopolitical tensions are contributing to greater uncertainty in crude supplies, driving up oil prices.About 350,000 homes and businesses lost power Monday in Tennessee, Arkansas and Texas as a winter storm brought freezing rain and snow, with more snow expected to hit the eastern United States Monday.Carsten Fritsch, commodities analyst at Commerzbank, said a cold snap in Texas triggered a fresh rally in oil prices amid fears of large-scale production disruptions like those seen early last year in the largest U.S. shale oil producer.In addition, Iraqi crude production in January was well below the quotas agreed by major producers, data from Iraq’s National Oil Marketing Agency showed.Manish Raj, chief financial officer of Villandra Energy of the US, said crude oil inventories in OECD countries were at multi-year lows and the market was relying on producers gradually increasing supply but overestimating their capacity to increase production.The organisation of the Petroleum Exporting Countries (Opec) is failing to meet its quotas, worsening the gap between supply and demand.Phil Flynn, an analyst at Price Futures Group, said oil prices still had room to rise because of tensions between Russia and Ukraine, which also kept traders on edge.Ubs said the increase in output would fall short of quotas as major producers face bottlenecks.Looking ahead to oil prices, Commerzbank raised its forecast for the first quarter of 2022 to $90 a barrel from $80, while UBS raised its forecast for Brent to $90 – $100 a barrel over the next few quarters from $85.Source: Xinhua News Agency (reporter Liu Yanan) Read: Yu Fanghua