NEW YORK (Oil Price) - Oil is headed for a sixth straight weekly gain, with prices trading near a seven-year high as crude makes a roaring start to 2022.
West Texas Intermediate traded near $88, taking its advance this week to about 3%, while the global Brent benchmark approached $91 as robust demand tightened global markets. As supply remains constrained, a chorus of Wall Street banks and oil executives are forecasting a return to $100 oil. Additionally, heightened geopolitical risks driven by fears that Russia may invade Ukraine have also contributed to crude’s climb.
“Demand has been strong, supply has been struggling a little bit to keep up with that and that’s reflected in the market,” said Chevron Corp. Chief Executive Officer Mike Wirth on Bloomberg TV. Wirth added that geopolitical events are impacting the commodity market more now than they did in the past and that $100 oil “is certainly within the realm of what we could see in the next few months.”
Oil’s stellar start to the year comes despite a soft patch in global equity markets after the Federal Reserve signaled it’s ready to tackle inflation. For now, crude prices have defied the pull of weaker risk sentiment elsewhere, with consumption on the brink of returning to pre-pandemic levels.
Attention will shift next week to the Organization of Petroleum Exporting Countries and its allies as they meet Feb. 2 to assess the market and decide on supplies for March. While OPEC+ has been steadily easing output curbs, there’s concern members have been unable to deliver the promised volumes in full.