Tokyo, Feb. 1 (BNA): Oil prices rose on Tuesday, hovering near seven-year highs last week, amid expectations that the limited increase in production by major oil producers and a strong recovery in fuel demand after the pandemic will remain narrow. display case.
Brent crude for April delivery rose 34 cents, or 0.4 percent, to $89.60 a barrel at 04:55 GMT.
Next month’s contract for delivery in March expired on Monday at $91.21 a barrel, up 1.3%.
US West Texas Intermediate crude rose 32 cents, or 0.4%, to $88.47 a barrel, after rising 1.5% the day before.
The two benchmarks hit their highest levels since October 2014 on Friday at $91.70 and $88.84, respectively. They posted a gain of about 17% in January, the largest monthly gain since February 2021, amid supply shortages and geopolitical tensions in Eastern Europe and the Middle East.
“The market maintains a bullish tone on expectations that supply tightness will continue as demand rises, as concerns about the spread of the omicron coronavirus variant recede,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“All eyes are on the OPEC + decision as well as the development of the conflict between Russia and the West over Ukraine,” he said, according to Reuters.
Market analysts and sources from Reuters widely expect OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, to maintain a policy of gradual increases in production when it meets on Wednesday.
A Reuters survey concluded on Monday that OPEC oil production in January again reduced the increase planned under an agreement with allies, highlighting the struggle of some producers to pump more even as prices rise.
“We expect a little bit of surprise from the OPEC+ meeting, although there is little chance that Saudi Arabia will voluntarily increase production outside of OPEC to avoid lower demand caused by higher prices,” said Naohiro Nimura, partner at Market Research Advisory. Research and consulting company.
“If there is no surprise, Brent crude is expected to remain between $85 and $95 for some time due to concerns about supply shortages amid rising geopolitical tensions,” he said.
Tensions between Russia and the West have supported crude oil prices. Russia, the world’s second largest oil producer, has been at loggerheads with the West over Ukraine, raising fears that energy supplies to Europe could be disrupted.
Washington and London said on Monday the United States and Britain were ready to punish Russian elites close to President Vladimir Putin with asset freezes and travel bans if Russia entered Ukraine, as tensions escalate at the United Nations.
The risk of geopolitical disruptions in oil supplies at a time when stocks were already tight due to a strong post-pandemic recovery has led to a higher premium charged by barrels for immediate delivery, suggesting that the current price rally should continue.
HF