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Oil prices turn lower, and US crude is below $75

  • 03 January, 2022
  • 6:58 pm EET

Oil prices turned lower today, Monday, in the first trading of the new year, after the session began on a rise, and Brent crude rose near $ 79 before falling back in volatile transactions.

The rise came at the beginning of the session, supported by the lack of supply and hopes for a further recovery in demand during 2022, but the pressures imposed by the Omicron axis pushed prices to decline, with attention shifting and focus on what will result from the OPEC + meeting scheduled for tomorrow, Tuesday.

Oil prices had ended Friday trading – the last days of 2021 – on the decline, but the benchmark crude (Brent) recorded a noticeable increase in the week and last month, amounting to 2.6% and 10.2%, respectively, while its gains reached nearly 50% in 2021. However, it witnessed a decline in crude by 0.9% in the fourth quarter of the year.

 

Oil prices today

The prices of West Texas Intermediate crude futures – February delivery – decreased by 0.41%, recording 74.90 dollars per barrel.

Brent crude futures prices – for March 2022 delivery – also fell by 0.14%, recording $77.67 a barrel.

This comes in conjunction with the announcement by the Libyan Oil Corporation that the country’s oil production will decrease by 200,000 barrels per day for a week due to the maintenance of a major pipeline between the Al-Sammah and Al-Dhahra fields.

 

OPEC+

Meanwhile, 4 sources said that OPEC+ will likely stick to its plan to add 400,000 barrels per day of supply in February, Reuters reported.

Last year, oil prices rose by nearly 50%, spurred by the global economic recovery from the coronavirus pandemic and producer controls, even as infections reached record levels around the world.

American health experts have warned citizens to prepare for severe disruptions in the coming weeks, with infection rates likely to worsen amid increased holiday travel and New Year’s celebrations and the reopening of schools after the winter holidays.

 

Oil prices in 2022

A Reuters poll conducted last Friday showed that oil analysts lowered their price forecasts for 2022; The omicron mutator forces headwinds to restore fuel demand and threatens to create a supply glut as producers pump more oil.

A survey of 35 economists and analysts expected that the average price of Brent crude will average $73.57 a barrel in 2022; About 2% below the expected level of $75.33 in November, this is the first cut in the price forecast for 2022 since the August poll.

The average price of US crude is expected to reach $71.38 per barrel in 2022, compared to $73.31 in the previous month.

For their part, US energy companies sought to add more drilling rigs for oil and natural gas; Higher prices have drawn some drillers back into drilling again, after demand slashed due to the coronavirus in 2020.

US crude oil production rose to 11.47 million barrels per day in October, up 6% from the previous month; Production in the Gulf of Mexico rose as the region recovered from hurricanes, according to a monthly report from the Energy Information Administration last Thursday.

 

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